DCF Studio

    DOW · NYQ · Basic Materials

    Dow Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 13.61

    Market price

    USD 34.18

    Implied upside

    -60.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 13.61-60.2%
    Exit multiple
    USD 44.29+29.6%
    Market price
    USD 34.18

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 43.9bnUSD 43.0bnUSD 42.4bnUSD 42.1bnUSD 41.9bnUSD 42.1bnUSD 42.4bnUSD 43.0bnUSD 43.8bnUSD 44.9bn+0.3%
    EBITUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.2bn+0.3%
    NOPATUSD 1.7bnUSD 1.7bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.7bn+0.3%
    Add depreciation & amortisationUSD 2.7bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.7bnUSD 2.8bn+0.3%
    Less capital expenditureUSD -2.5bnUSD -2.5bnUSD -2.6bnUSD -2.6bnUSD -2.7bnUSD -2.8bnUSD -2.9bnUSD -3.1bnUSD -3.2bnUSD -3.4bn+3.7%
    Capex, % of revenue5.6%5.8%6.1%6.3%6.5%6.7%6.9%7.2%7.4%7.6%-
    Less increase in working capitalUSD -569.3mUSD 124.8mUSD 87.5mUSD 51.9mUSD 17.5mUSD -16.6mUSD -50.6mUSD -85.4mUSD -121.4mUSD -159.2m-13.2%
    Free cashflow to firmUSD 1.3bnUSD 1.9bnUSD 1.8bnUSD 1.6bnUSD 1.5bnUSD 1.4bnUSD 1.2bnUSD 1.1bnUSD 1.0bnUSD 911.5m-4.3%
    Discount factor0.96890.90950.85380.80150.75240.70630.66300.62240.58420.5484-
    Present valueUSD 1.3bnUSD 1.7bnUSD 1.5bnUSD 1.3bnUSD 1.1bnUSD 958.2mUSD 822.5mUSD 702.6mUSD 595.8mUSD 499.9m-
    Present Value Of The ForecastUSD 10.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.589Reported 0.386, pulled toward 1.0 (Blume)
    Cost of equity7.38%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a D rating at 0.2x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 4.6%.
    Market capitalisationUSD 24.7bn55.8% of capital
    Total debtUSD 19.6bn44.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.53%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 13.61

    59% of EV

    Forecast FCFF, final year
    USD 911.5m
    Capex at depreciation, working capital in reinvestment
    USD 1.7bn
    Less reinvestment at g/ROIC (38.3% of NOPAT)
    USD -664.6m
    Capitalised
    USD 1.1bn
    ROIC (WACC floor)
    6.5%
    Terminal value, undiscounted
    USD 27.2bn
    Terminal value, discounted
    USD 14.9bn
    Enterprise value
    USD 25.5bn
    Less net debt
    USD 15.8bn
    Equity value
    USD 9.7bn

    Exit at 13.5x EBITDA

    Value per shareUSD 44.29

    78% of EV

    Terminal value, undiscounted
    USD 67.1bn
    Terminal value, discounted
    USD 36.8bn
    Enterprise value
    USD 47.3bn
    Less net debt
    USD 15.8bn
    Equity value
    USD 31.5bn

    Spread between methods: 106%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.53%31.4131.3531.6332.5535.10
    5.53%20.9520.3519.7419.1418.53
    6.53%14.5814.0913.6113.1212.64
    7.53%9.899.509.108.708.30
    8.53%6.315.975.645.314.98

    Outlined: this model. Green text: above today's price of 34.18. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-11.1%1.2%7.9%
    EBIT margin10.0%4.9%7.7%
    Discount rate-6.5%4.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.