Deutsche Bank (DB) increased its price target on shares of Dow Chemical Co. (NYSE:DOW) to $35 from $34, while maintaining its "Hold" rating.
Dow shares fell 3% post its Q1 release, in the brokerage's view, due to muted leverage to low cost ethane. The firm expects modestly stronger results in Q2 reflecting continued demand improvement and lagged benefits from low cost ethane.
However, with Q2 upside limited by seasonally lower Ag demand and $100 million in higher plant maintenance costs, DB is lowering Q2 EPS by $0.05 to $0.65.
With investor sentiment favoring cyclical commodity exposure (versus Dow's more stable EPS growth) and valuation a fair 13.1 times 2012 EPS, the brokerage maintained its rating.
Dow Chemical is a diversified manufacturer and supplier of chemical products used primarily as raw materials in the manufacture of customer products and services worldwide.
DOW is trading down 0.34% at $34.73 on Friday.