Is Dow, Inc. overvalued or undervalued?

As of 30 January 2025, Dow, Inc. has moved from a valuation grade of very expensive to very attractive, indicating a significant shift in its market perception. The company is currently undervalued, with a P/E ratio of 32, which is lower than peers like Linde Plc at 35.40 and Ecolab, Inc. at 41.56. Additionally, Dow's EV to EBITDA stands at 8.19, which is more favorable compared to Linde's 21.07, suggesting better operational efficiency relative to its valuation.
The company's financial metrics also show promise, with a Price to Book Value of 1.24 and a Dividend Yield of 711.74%, indicating strong returns for investors. However, Dow's ROCE and ROE are relatively low at 4.68% and 3.89%, respectively, which could be a concern for potential investors. Despite the recent underperformance compared to the S&P 500, where Dow has seen a 1-year return of -50.23% against the index's 10.26%, the current valuation suggests that there may be an opportunity for recovery and growth in the near future.