The heightened volatility in the stock market over the past month hasn’t just been reflected in shares moving lower. Some stocks have done very well since the start of the year. For example, I just spotted one S&P 500 company that’s up a whopping 59% in under three months. Time to explore?
The details
I’m talking about Dow Inc (NYSE:DOW). The company makes chemicals and materials used in everything from packaging to infrastructure. Its three main segments are Packaging & Speciality Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings. In 2025, Dow generated $40bn in net sales, so this is no niche player.
The most significant catalyst behind the surge this year is the launch of the “Transform to Outperform” program from late January. Management outlined cost-cutting measures, including the elimination of approximately 4,500 jobs globally. At the same time, it’s putting a heavy focus on using AI and automation to modernise customer service and manufacturing workflows. The bottom line is that they expect it to deliver $500m in value within this year alone.
Zooming out
Despite the pop this year, the stock is only up 3% over a broader one-year time horizon. This speaks to the fact that last year, investors were left pretty fed up after the company generated a massive $2.6bn net loss. Part of this loss was due to weak demand in international markets such as Europe. This remains a risk going forward.
Yet the transformation plan has sparked such optimism that the slump in the stock has now been completely recovered. But the share price is still a long way off historical highs. It’s down 41% in the last five years.
Looking ahead, it’s hard to make a concrete call now on whether the stock will keep rallying, as a lot depends on updates on the transformation. If good news comes out in the months to come that shows it’s progressing well, I think there’s plenty of room for the stock to keep jumping.
Yet even without that element, the company could benefit from continued supply disruptions in the sector. Conflict in the Middle East is estimated to have taken roughly 15% of global polyethylene capacity offline. This supply crunch actually benefits Dow as its products become more valuable. If the situation takes a long time to resolve, it could provide a boost to earnings, even though it’s not in a sustainable way.
The bottom line
I believe the stock could be a good value pick, but I want to get more confirmation first. The Q1 results are due in a month, so I’m going to wait for them before making a decision. I know that increased volatility and uncertainty with geopolitics remain risks, but if the turnaround plan starts to yield results, the stock has large potential. Investors who agree with my viewpoint could consider adding the stock to their watchlist.
