Dow Inc. DOW benefits from cost and productivity initiatives, growth actions in attractive markets, and an advantaged feedstock position amid demand and cost headwinds.
DOW, which is among the prominent players in the chemical space along with DuPont de Nemours, Inc. DD, Air Products and Chemicals, Inc. APD and Eastman Chemical Company EMN, is well positioned with its differentiated portfolio and advantaged feedstock positions in the Americas. It remains focused on investing in attractive areas. Its broad portfolio, significant low-cost feedstock positions, global footprint and market reach place it in an advantageous position against competitors.
Recent alkoxylation investments are contributing to growth in the Industrial Solutions business. The company is also expanding specialty silicones capabilities for mobility, electronics and healthcare, while increasing its emphasis on higher-value downstream applications. Dow has completed the shutdown of its higher-cost Barry, U.K., upstream siloxanes unit, shifting its silicones mix by more than 25% toward more stable and higher-margin businesses while maintaining value-chain integration.
The Barry action is expected to provide about $60 million of EBITDA uplift in the second half of 2026. Dow also restarted its lowest-cost and most flexible European cracker in Terneuzen and remains on track to shut the Bohlen cracker by year-end 2027, actions aimed at improving its cost-curve position and regional flexibility. The Alberta project continues to progress on its revised timeline, with roughly 60% of capital expenditures already spent, most critical labor contracts awarded and incentives intact.
Dow continues to emphasize cost and operational discipline through restructuring, productivity and process simplification. The company materially completed its $1 billion 2025 cost program and delivered more than $300 million of in-period self-help benefits in the second quarter of 2026. It now expects more than $1.3 billion of total self-help benefits in 2026. DOW has launched the “Transform to Outperform” initiative to improve productivity, reduce complexity, streamline its end-to-end processes and enable improved returns. The initiative is expected to contribute about $700 million in 2026.
Dow, however, remains sensitive to energy and raw-material volatility. The Middle East conflict has kept logistics constrained and traffic through the Strait of Hormuz below historical levels, supporting higher risk premiums for energy and feedstocks. Management described the third-quarter environment as supportive but higher cost and noted that crude oil and key feedstocks had risen sharply. Elevated feedstock and energy costs are likely to impact margins in the third quarter.
Dow also remains exposed to weak and inconsistent demand across several regions and end markets. Packaging demand is resilient globally, and U.S. consumer spending has held up, but the U.S. housing market remains weak because of affordability concerns and high mortgage rates. In Europe, structural operating and labor costs persist despite emerging government support and trade protection measures.
In Asia Pacific, industrial production and manufacturing activity have improved, but consumer demand remains soft and uneven. Middle East tensions and constrained shipping also continue to disrupt supply chains. These conditions were visible in second-quarter 2026 volumes, which fell 1% year over year at the company level. DOW expects a normal seasonal decline in building and construction demand in the third quarter, along with lower seasonal coatings demand.
Nevertheless, Dow expects approximately $200 million in additional benefits from Transform to Outperform during 2026. For the second half of 2026, DOW plans to focus on growth and innovation in attractive end markets, investments to strengthen the portfolio and balanced capital allocation.
Another prominent chemical maker, DuPont raised the midpoint of its full-year 2026 operating EBITDA and adjusted earnings guidance following its second-quarter outperformance. The company now expects net sales in the range of $7.16-$7.19 billion, operating EBITDA between $1.75 billion and $1.77 billion and adjusted earnings of $7.17-$7.32 per share.
Air Products, on its fiscal third quarter call, raised its fiscal 2026 adjusted earnings guidance to $13.39-$13.49 per share from the prior range of $13.00-$13.25. For the fourth quarter of fiscal 2026, APD expects adjusted earnings of $3.55-$3.65 per share.
Eastman Chemical, on its second-quarter call, said that it expects 2026 earnings to improve significantly from 2025. EMN remains on track to deliver cost reductions of $125 million to $150 million, net of inflation, and continues to project capital expenditures of approximately $400 million. Operating cash flow is now expected to approach $900 million, modestly below the prior expectation of approaching the 2025 level.
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