UPDATE: Deutsche Bank Upgrades Dow Chemical Co

Deutsche Bank upgraded Dow Chemical Co (NYSE: DOW) from Hold to Buy and raised its price target from $57 to $58 in a report issued Thursday.

The upgrade was made as analyst David Begleiter believed "the risk/reward is attractive...Dow shares are down 13 percent from their September high. Based on our lowered ‘15E EPS (to reflect the impact of lower oil prices), we believe there is 5 percent downside to the shares based on Dow trading at its 5 year NTM P/E of 14x."

In contrast to the downside, Begleiter believed "there is 20 percent-plus upside should cycle concerns abate and Dow continue to execute (8 straight quarters of EPS growth)."

Begleiter saw "a path to $12.5B of EBITDA and $5-plus of EPS in ’18 for Dow driven" by several new projects.

The report concluded that with the "full benefit of Dow’s highly visible and high return projects and internal growth actions not fully realized until 2018, we believe it is best to value Dow on ’18 EPS. Maintaining the current forward year (’15) P/E multiple of 14.6x on the projected $5-plus of EPS in ’18 and discounting it back 2 years (at 10 percent) yields a 12 month price of $60-plus, strongly supportive of our $58 price target."

Dow Chemical Co traded at $48.75 in the premarket, up 2.39 percent.