Dow, Lyondell downgraded to Neutral rating at JPMorgan Chase

Dow (NYSE:DOW) and LyondellBasell (LYB) on Friday were downgraded to Neutral from Overweight at JPMorgan Chase. The bank said the companies are grappling with declining prices for commodity chemicals and lower volumes.

Both companies offer dividend yields that are greater than 5.5%. They also likely will have free cash yields that are more 10% in 2023, analysts at JPMorgan Chase said.

Because Dow and LyondellBasell also have strong balance sheets, the analysts said they were unwilling to downgrade the stocks further to Underweight.

“The market will probably have difficulty calibrating the degree of EBITDA weakness the companies are likely to experience in the context of a slowing global economy with rising interest rates,” according to the report.

Seeking Alpha contributor Gen Alpha rates LyondellBaselll (LYB) a Buy on its solid financials and high dividend yield. Contributor Cavenaugh Research has a Buy rating on Dow (DOW) because of its dividend and long-term outlook.