Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for businesses that can raise prices without losing customers, earn high returns on capital without heroic reinvestment, and compound quietly through good times and bad. Dow is none of these things. It is a well-run, honestly managed, enormous commodity chemical producer whose profits are set by global supply and demand curves that management does not control, and the last three years have demonstrated this with brutal clarity: a $2.4 billion net loss in 2025, negative free cash flow, a 50% dividend cut, and 6,000 announced job eliminations across two restructuring programs. The second quarter of 2026 was genuinely good — sales up 20% to $12.1 billion, operating EPS of $1.44, a cyclical recovery in polyethylene prices doing what cyclical recoveries do. The stock at $29.81 is not expensive against mid-cycle earnings. But cheapness was never our test.
Recent filings analysed: 10-Q (2026-07-24), 8-K (2026-07-23), 8-K (2026-07-10), 8-K/A (2026-07-06).
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