Dow Inc. (DOW) DCF Valuation
Why we don't show a single “fair value” for DOW
A trailing-FCF DCF can't fairly anchor Dow Inc. right now — free cash flow has been negative in recent years. For a company in this position, trailing free cash flow understates what the business actually earns for owners, so any “fair value” built on it would be misleadingly low. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$33.85 is justified only if free cash flow grows about +10.9% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $9.62 |
| Base case | 2.0%/yr | 7.5% | $17.40 |
| Optimistic | 5.0%/yr | 6.5% | $32.61 |
| Analyst DCF (FMP) | independent reference — different model | $70.82 | |
Current Price
$33.85
Market-Implied Growth
+10.9%/yr
vs -0.7% 5Y actual
Base-Case Model Value
$17.40
model output — not a price target
DOW DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DOW (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.3B · 0.72B shares · net debt $13.2B
Estimated Fair Value
$16.76
-50.5% vs $33.85
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $33.85; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $28.79 | $33.58 | $39.96 | $48.91 | $62.32 |
| 6.5% | $19.30 | $22.04 | $25.46 | $29.86 | $35.73 |
| 7.5% | $12.98 | $14.70 | $16.76 | $19.27 | $22.42 |
| 8.5% | $8.47 | $9.61 | $10.95 | $12.53 | $14.42 |
| 9.5% | $5.09 | $5.89 | $6.80 | $7.86 | $9.09 |
About Dow Inc.
Dow Inc. is a global leader in materials science, delivering diverse solutions for key industries such as packaging, infrastructure development, mobility, and consumer products. The company's reach extends across numerous regions, including the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. Its operations are structured into three main divisions: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings. The Packaging & Specialty Plastics segment is responsible for producing foundational chemicals like ethylene, propylene, and aromatics, along with a range of polymers including polyethylene, polyolefin elastomers, ethylene vinyl acetate, and ethylene propylene diene monomer rubbers. The Industrial Intermediates & Infrastructure segment offers a broad spectrum of products, from ethylene and propylene oxides, propylene glycol, and polyether polyols to aromatic isocyanates and comprehensive polyurethane systems. This division also provides coatings, adhesives, sealants, elastomers, and composite materials, alongside essential chemicals such as caustic soda, ethylene dichloride, and vinyl chloride monomers. Additionally, it supplies specialized products like cellulose ethers, redispersible latex powders, and acrylic emulsions. The Performance Materials & Coatings division focuses on architectural and industrial paint and coating solutions, catering to diverse applications including maintenance, protective finishes, wood, metal packaging, traffic markings, thermal paper, and leather goods. This segment also develops high-performance silicones, specialty materials, and the necessary feedstocks and intermediates for silicone production. In addition to its core materials science endeavors, Dow Inc. also engages in the property and casualty insurance, and reinsurance businesses. The company was founded in 2018 and is headquartered in Midland, Michigan.
- Sector
- Basic Materials
- Industry
- Chemicals
- CEO
- James R. Fitterling