Chemical companies fall after BofA downgrades ratings citing unsustainable gains, conflict risks

Shares of chemical companies fall after BofA Global Research downgrades ratings

BofA downgrades Dow DOW.N and LyondellBasell LYB.N to "underperform" from "neutral"; downgrades Westlake WLK.N to "neutral" from "buy"

BofA says recent share gains based on temporary market factors make the stock less attractive now

Adds, despite the possibility of strong earnings, it has "little desire to capitalize material 'overearning' associated with the Iran conflict,"

Brokerage believes while the war may keep oil prices higher for longer, it still expects petrochemical prices to drop significantly after a likely peak in the second quarter of 2026

Shares of DOW fall 2.7%, LYB down 2.1%, and WLK slips 1.7%

However, brokerage raises price target expecting short-term disruptions in the market and believes that energy prices will be higher than usual in 2027 and beyond

Brokerage raises the price objective for the following companies: