Dow Inc. DOW announced that it is developing new post-consumer recycled (PCR) resins, which will be offered worldwide. Notably, the recycled plastic resins are geared to harness the resources of used plastic packaging to create new packaging materials, thereby reducing waste.
The new offering of PCR resins is part of Dow’s comprehensive strategy to develop a circular plastics economy by focusing on incorporating recycled content into product offerings.
The new PCR resins, which are already offered in Europe and Asia, provide consumers and brands with similar performance to packaging made with virgin resins. Moreover, the newly formulated PCR resins have the capacity to lower carbon and energy footprints by up to 20-30%. Further, the resins give a new life to used plastics that otherwise would have become waste. Also, the new PCR resins will help ensure products are offered safely.
The new material directly aids the recently announced sustainability goals of Dow, which include commitments to stop waste by allowing one million tons to be collected, reused or recycled by 2030. It also helps the company lower the net annual carbon emissions by five million tons by 2030 toward its goal of achieving carbon neutrality in 2050.
In order to meet these goals, Dow, with its industry partners, recyclers and waste management companies, is increasing the value of used plastics by developing higher-value recycled applications, investing in innovation and finding ways to integrate more recycled content into new, high-performance materials.
The company’s shares have lost 16% in the past year compared with the 15.2% decline recorded by the industry.
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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 impacts of the same 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 align production to demand across markets, which have been significantly affected by restrained economic activities.
Dow Inc. Price and Consensus
Zacks Rank & Stocks to Consider
Dow currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space are, AngloGold Ashanti Limited AU, Franco-Nevada Corporation FNV and Agnico Eagle Mines Limited AEM
AngloGold Ashanti currently sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 109.9% for 2020. The company’s shares have gained 46.5% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada has a projected earnings growth rate of 19.2% for the current year. The company’s shares have rallied around 53% in a year. It currently has a Zacks Rank #2 (Buy).
Agnico Eagle has an expected earnings growth rate of 53.6% for 2020. The company’s shares have gained 13.2% in the past year. It presently carries a Zacks Rank #2.
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