Dow (DOW) is not expected to see a "significant step-up" in H2, with tariffs still posing a risk to export volumes, as the company's earnings outlook remains "weak," RBC Capital Markets said in a note emailed Friday.

Dow, however, continues to work to secure cash, and polyethylene price assumptions of +5-7 cents per pound in July could be optimistic, RBC said.

Dow expects Q3 earnings before interest, taxes, depreciation, and amortization of $800 million, an improvement of $100 million from Q2, Chief Financial Officer Jeffrey Tate said during an earnings call Thursday, according to a FactSet transcript.

Dow also cut its dividend by half to $0.35 per share, which should help financial flexibility, balance sheet preservation and credit profile preservation, "given the lower-for-longer earnings outlook for the industry," RBC said.

RBC cut its price target on Dow to $26 from $30 and maintained its sector perform rating.

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