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Dow (DOW) Introduces PCR Plastic Resin in Asia Pacific Region

Zacks Equity Research

Dow Inc. DOW developed and commercialized a new formulated post-consumer recycled (PCR) plastic resin geared for collation shrink film applications in the Asia Pacific.

The new resin is made with 40% PCR content. Notably, the resin is geared to be utilized as 100% of the core layer of collation shrink applications. It is also expected to enable the development of film with 13-24% recycled content.

The newly formulated PCR resin can offer comparable performance to consumers and brands to collation shrink film made with virgin resins to ensure products are delivered safely.

The PCR resin also lowers carbon dioxide and energy footprints, helping converters, brand owners and retailers to meet their sustainability goals. Moreover, it also gives a new end of life to plastics that otherwise would have become waste.

The new offering of formulated PCR resin is part of Dow's comprehensive strategy to develop a circular plastics economy by focusing on incorporating recycled content into product offerings.

The company’s shares have lost 18% in the past year compared with the 17% decline recorded by the industry.

 

 

Dow, on its first-quarter earnings call, said that it is seeing indications of a recovery from the virus outbreak in China, while still assessing the impact of the pandemic in other major geographies. Factoring in a gradual and sustainable return of global economic activities, and the reopening of economies in May and June, the company expects recovery as the year progresses.

Dow also said that it is taking actions to further strengthen its financial position. These include the reduction of operating expenses by $350 million and further trimming of capital expenditure target to $1.25 billion (a $750 million reduction from that in 2019). The company is also temporarily idling certain manufacturing units to balance the production to demand across markets that have been significantly affected by restrained economic activities.

Dow Inc. Price and Consensus

 

Dow Inc. Price and Consensus

Dow Inc. price-consensus-chart | Dow Inc. Quote

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the basic materials space are Agnico Eagle Mines Limited AEM, Equinox Gold Corp. EQX and Newmont Corporation NEM.

Agnico Eagle currently sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 75.3% for 2020. The company’s shares have gained 53.5% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinox Gold has a projected earnings growth rate of 65.5% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 53.5% in a year.

Newmont has a projected earnings growth rate of 82.6% for the current year. The company’s shares have rallied around 86% in a year. It currently has a Zacks Rank #2.

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