Citi Says Buy Dow Chemical

Citi Investment Research has a Buy rating and a $34 price target on shares of Dow Chemical Co DOW. In a note sent to investors, Citi writes, "We met with Markus Wildi (head of the Middle East), Raja Zeidan (Feedstocks & Hydrocarbons), and Ramesh Ramchandran ( head of MEGlobal). The Middle East region is not only a source of cheap feedstocks for DOW, it is also a region on an infrastructure building spree. The region is projected to spend roughly $2-$3 trillion over the next 10 years in construction, oil & gas, and water desalination. This figure doesn't even include an estimated $50B to be spent in Qatar for World Cup soccer in 2022. While some of the spending may be delayed or cancelled in credit-challenged regions like Dubai, projects in areas rich in oil & gas (Saudi Arabia, Kuwait, Qatar and Abu Dhabi) should proceed, given oil prices close to $90/bbl. DOW is looking to take advantage of this spending as its Performance Systems & Performance Products businesses sell advanced materials used in construction." Shares of DOW closed at $34.07 on Friday.