247Wallst·2026-03-09 15:38Core Viewpoint - Wall Street analysts have upgraded Dow Inc. and LyondellBasell Industries due to geopolitical disruptions in Iran tightening global polyethylene supply, which was already low [1]. Group 1: Company Upgrades - RBC Capital Markets upgraded Dow Inc. from Sector Perform to Outperform, raising its price target from $29 to $40, citing potential polyethylene margin upside due to supply disruptions [1]. - LyondellBasell was also upgraded to Outperform with a price target increase from $51 to $82, highlighting its leverage to an olefins and polyolefins recovery amid constrained global supply [1]. Group 2: Market Conditions - The geopolitical situation in Iran is expected to lead to a temporary 5%–10% tightening of global polyethylene supply, as noted by KeyBanc Capital Markets [1]. - Morningstar analysts suggest that fair values for U.S. chemical companies could rise by 5%–20% if a prolonged supply shock occurs, indicating the sector is currently undervalued [1]. Group 3: Stock Performance - Dow Inc. was trading at $33.28, reflecting a year-to-date gain of 43.97% from a December 31 close of $23.12, while the average analyst price target is $31.71 [1]. - LyondellBasell closed at $67.11, with a year-to-date gain of 56.84%, yet RBC's target of $82 implies further upside potential [1]. Group 4: Financial Performance - Dow reported a GAAP net loss of $1.48 billion in Q4 2025, with operating EBIT dropping to $33 million from $454 million in Q4 2024, and a full-year free cash flow of negative $1.417 billion [1]. - LyondellBasell's Q4 adjusted EPS of -$0.26 missed consensus estimates, primarily due to rising NGL feedstock costs, but its Q1 2026 outlook remains positive due to tight inventories and seasonal demand [1]. Group 5: Analyst Sentiment - The broader analyst consensus remains cautious, with Dow's average price target at $31.71 and LyondellBasell's at $54.33, indicating a more reserved outlook compared to RBC's targets [1].