Launching Coverage of Dow Chemical and Awarding Narrow Moat; Shares Attractive Versus Our $65 FVE

We’re launching coverage of Dow Chemical, one of the largest chemical manufacturers in the world, with a $65 per share fair value estimate. The company produces chemical derivatives applicable in a myriad of consumer and industrial end products, ranging from inks to adhesives to crop protection. We award the firm a narrow moat and stable moat trend based on a significant cost advantage derived from its North American-based production. Despite near-term headwinds from inflated input costs, we’re optimistic about the firm’s prospects in the medium to long term. Accordingly, we view shares as undervalued relative to our fair value estimate. The firm earns a Morningstar Uncertainty Rating of Medium.