Current Price
$34.13
Intrinsic Value
$28.37
-20.3% margin of safety
What Is Dow Inc.'s Intrinsic Value?
As of 2026-10-28, the base-case DCF model estimates the intrinsic value of Dow Inc. (DOW) at $28.37 per share, compared with a market price of $34.13, a margin of safety of -20.3%. The base case assumes 1.5% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $23.37 to $34.1. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Dow Inc. (DOW) Undervalued?
At the current price of $34.13, DOW trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Proprietary Technology & Innovation
Dow's VOLTRICELL platform showcases its commitment to advanced materials. This focus on proprietary technology creates a competitive edge in specialized chemical applications.
↑Scale and Manufacturing Efficiency
As a major chemical producer, Dow benefits from significant economies of scale. This allows for cost efficiencies in production and distribution, making it difficult for smaller competitors to match.
↑Global Distribution Network
Dow possesses an extensive global reach for its products. This established network ensures reliable supply chains and market access, a significant barrier for new entrants.
INVESTMENT RISKS
↓Cyclicality of Chemical Demand
The chemical industry is inherently cyclical, tied to global economic activity. Downturns can significantly impact Dow's sales volumes and profitability.
↓Regulatory and Environmental Scrutiny
Chemical companies face increasing regulatory oversight and environmental concerns. Compliance costs and potential liabilities can impact operations and profitability.
↓Raw Material Price Volatility
Dow's profitability is sensitive to fluctuations in the cost of raw materials. Unpredictable price swings can squeeze margins if not effectively managed.
Base case
DOW base case valuation
Intrinsic Value
$28.37
Margin of safety
-20.3%
Expected annual return
-3.6%
Base case assumptions: 1.5% annual growth, 10.0% discount rate, 24.58x exit multiple, 5 year projection. Data as of 2026-10-28.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DOW valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Dow Inc. respond.
Open DCF Calculator for DOWCompany Overview
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.
Financial Metrics — DOW Stock Valuation Data
Revenue/Share (TTM)
$58.74
FCF/Share (TTM)
$1.39
ROIC (TTM)
1.1%
ROE (TTM)
-4.5%
P/FCF
24.6x
EV/EBITDA
11.2x
FCF Yield
4.07%
Debt/Equity
1.17x
Based on trailing twelve-month data, DOW shows a free cash flow per share of $1.39 and a ROIC of 1.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 24.6x and FCF yield of 4.07% are important context metrics when evaluating DOW's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DOW?
Dow Inc. currently generates $1.39 in free cash flow per share. At the current price of $34.13, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DOW undervalued?
DOW trades at a P/FCF ratio of 24.6x with a free cash flow yield of 4.07%. This P/FCF is in a moderate range. However, whether DOW is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DOW stock using DCF?
To perform a DCF valuation on Dow Inc.: (1) Start with the trailing free cash flow per share ($1.39) as the base, (2) project future FCF growth over 5-10 years based on Chemicals industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DOW's risk profile — with a debt-to-equity of 1.17x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DOW?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Dow Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Chemicals trends, then discounting those amounts to today's dollars. DOW's ROIC of 1.1% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect DOW stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DOW, with a debt-to-equity ratio of 1.17x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DOW PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value DOW with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.