NEW YORK (TheStreet) -- The Dow Chemical Co. (DOW) - Get Report shares slumped 2.74% to $51.92 on Wednesday as the EPA plans to revoke approval of the company's Enlist Duo herbicide, after new information showed the harmful effects of the weedkiller, the Wall Street Journal reports.
Specifically, ingredients could be more toxic to nearby plants than the EPA had previously thought.
Dow Chemical remains confident in its herbicide, stating "We are working with EPA to quickly provide further assurances that our product's conditions of registered use will continue to protect the environment, including threatened and endangered plant species," according to the Journal.
Based in Midland, MI, Dow Chemical manufactures and supplies products that are used primarily as raw materials in the manufacture of customer products and services worldwide.
Separately, TheStreet Ratings team rates DOW CHEMICAL as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate DOW CHEMICAL (DOW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 46.7% when compared to the same quarter one year prior, rising from $937.00 million to $1,375.00 million.
- The debt-to-equity ratio is somewhat low, currently at 0.81, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $2,511.00 million or 41.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.62%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, DOW CHEMICAL has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: DOW