Dow's (DOW) Q4 recovery remains intact after an expected slowdown in Q3 amid headwinds, RBC Capital Markets said Tuesday in a report.

The company lowered its Q3 EBITDA guidance midpoint to $1.55 billion from $1.7 billion on weaker polyethylene pricing, the report said.

RBC also noted supply and demand pressure in Q3 stemming from strong Chinese production across several chains, including acetyls.

Q4 should improve, helped by lower turnaround expenses, the bulk of a positive September polyethylene settlement flowing through next quarter, and continued cost-reduction benefits, the report said.

RBC cut its price target on Dow stock to $29 from $32 and maintained its sector-perform rating.

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