Three Stocks on a Fire Sale
Stock markets might trade at all-time highs, but they have left behind three companies. In the chemicals sector, Dow Inc. (DOW) broke its support price of $30, formed since April.
In the second quarter, the company posted a non-GAAP EPS of -$0.42. Revenue fell by 7.3% Y/Y to $10.1 billion. This forced the firm to slash its dividend. In Q3, Dow is forecasting net sales of $10.1 billion (-7% Y/Y). EBITDA of $800 million is a $100 million sequential improvement.
Dow will need to complete $400 million in cost reduction savings this year. Macroeconomic headwinds are offset by its packaging and specialty plastics.
In biotechnology, Sarepta (SRPT) continued its drop, where shares once traded at $150.48. The media reported that the U.S. FDA is investigating the fatality of an 8-year-old boy who received Elevidys treatment. Bears hold a 14.94% short interest against SRPT stock.
Molina Healthcare (MOH) broke down from a $300 support line in July. The medical cost trend environment is a challenge. The firm needs to manage those cost pressures.
For the year, Molina’s management is guiding on Marketplace MCR rising from 80% to 85%. It will protect its margin by letting “membership fall where it may” in Marketplace.
Molina set a $19 EPS target for 2025. It is aiming for revenue of $46 billion in 2026 and $52 billion in 2027.
