MIDLAND, MI – Dow (NYSE:DOW), a global leader in materials science, has entered into an agreement to acquire Circulus, a prominent recycler of plastics, as part of its ongoing sustainability initiatives. The acquisition will include two Circulus facilities, one in Ardmore, Oklahoma, and another in Arab, Alabama, boosting Dow's recycled materials capacity by 50,000 metric tons annually.
Expected to be finalized in the third quarter of 2024, pending regulatory approvals, this move aligns with Dow's 2030 Transform the Waste goal. The company aims to transform plastic waste into 3 million metric tons of circular and renewable solutions each year by 2030.
Karen S. Carter, president of Packaging (NYSE:PKG) & Specialty Plastics at Dow, remarked that the acquisition would merge Dow's materials science technology with Circulus' film recycling expertise, enhancing the company's ability to produce higher-performing circular products. These are increasingly sought after by brands and consumers focused on sustainability.
Circulus' recycling capabilities are set to complement Dow's portfolio, particularly in applications such as packaging films and liners, with potential expansion into the industrial, consumer, and transportation markets.
Mike Dulin, CEO of Circulus, expressed enthusiasm about joining forces with Dow to further the progress of a circular economy. He highlighted Circulus' advanced technology in recycling plastic packaging waste and the company's commitment to producing high-quality, sustainable resins.
Dow, which operates in 31 countries and employs about 35,900 people, reported sales of approximately $45 billion in 2023. The company continues to focus on innovation and sustainability to maintain its position as a leading materials science company.
This transaction is part of Dow's broader strategy to build industrial ecosystems for waste reuse and recycling, thereby meeting the rising demand for sustainable solutions. The information for this report is based on a press release statement.
In other recent news, Dow Inc (NYSE:DOW). has been the focus of several key updates. Piper Sandler maintained its Overweight rating on Dow, following comprehensive discussions with the company's senior management. The firm's positive outlook on Dow's strategic direction was reaffirmed, highlighting the potential for growth.
Dow also announced plans to acquire Circulus Holdings PBLLC, a North American recycler. This move is expected to enhance Dow's materials science technology and further the company's '2030 Transform the Waste' goal.
Analyst firm Jefferies recently downgraded Dow's shares from a $60 price target to $55, citing potential risks associated with prolonged high-interest rates. However, the firm has also upgraded Dow from Hold to Buy, raising the price target to $101, due to an expected cyclical recovery in key sectors. Evercore ISI maintained its In Line rating and a $62.00 price target for Dow, emphasizing the company's strategic initiatives and growth plans.
These are recent developments that underscore Dow's ongoing activities and strategic maneuvers in the marketplace. It is important to note that these updates are based on analyst assessments and company announcements, and they do not represent personal opinions or predictions.
InvestingPro Insights
Amid its strategic expansion in sustainability, Dow (NYSE:DOW) is demonstrating a commitment to enhancing shareholder value through multiple avenues. A notable InvestingPro Tip highlights that management has been aggressively buying back shares, signaling confidence in the company's future performance and a potential increase in shareholder returns.
Moreover, as Dow focuses on its 2030 sustainability goals, investors may find reassurance in another InvestingPro Tip which indicates that the company is expected to be profitable this year, a trend supported by analysts' predictions.
With a significant dividend yield of 5.29%, the company stands out as an attractive option for income-seeking investors. This is particularly relevant considering the recent acquisition of Circulus, which may further bolster Dow's market position and drive future profitability.
From a financial standpoint, Dow's InvestingPro Data shows a P/E ratio of 31.71, which reflects a premium valuation compared to the industry average. However, the adjusted P/E ratio for the last twelve months as of Q1 2024 is lower at 24.53, suggesting a more favorable earnings outlook.
Moreover, despite a revenue decline of 18.61% over the last twelve months as of Q1 2024, Dow maintains a solid market capitalization of 37.34 billion USD, underscoring its substantial footprint in the chemicals industry.
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