Shares of Dow Inc. DOW, +3.40% surged 3.3% to pace the Dow Jones Industrial Average’s DJIA, -0.41% premarket gainers, after J.P. Morgan turned bullish on the materials science company, as business conditions in the middle of December look “much better” than they did two weeks ago. Analyst Jeffrey Zekauskas raised his rating to overweight from neutral, while boosting his stock price target to $60 from $47. Zekauskas said while expectations were for domestic polyethylene (PE) prices to decrease, he believes there is a 75% chance that prices will settle flat for December and January, and that there’s a 25% chance they might increase. He said there is “little chance” that prices will be lower. “Domestic PE outages, rising oil values lifting Asian PE values, good demand in China, increased opportunities for North American producers to ship PE to Asia because of rising global shipping costs and logistics issues, and continued good domestic demand have led to a snug market,” Zekauskas wrote in a note to clients. “We do not believe that this more favorable price outlook is priced into Dow shares.” Dow’s stock has slipped 1.6% year to date through Thursday, while the Dow industrials has gained 6.2%.
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