Now is the time to buy the dip in chemical company Dow Inc. , says JPMorgan. The bank upgraded Dow to overweight from neutral and maintained its price target of $55, implying shares can gain 9.5% from where they closed Friday. “We think the recent downward movement in equity values has given investors an opportunity to purchase Dow shares at a reasonable valuation,” analyst Jeffrey Zekauskas wrote in a Monday note. Shares of Dow, which serves as a holding company for Dow Chemical and its subsidiaries, have lost 7.9% this month and 0.3% in 2023. The stock is up nearly 1.6% in premarket trading Monday. Zekauskas said Dow offers a 5.6% dividend yield, a strong balance sheet, a cyclically low earnings profile and potential positive responsiveness to higher oil price values. But the company’s equity value could still increase along with its payout, he noted. The analyst said Dow has underperformed chemical company LyondellBasell this year and over the past 12 months because of its dividend. Dow’s dividend is flat, while Lyondell’s dividend has increased by 19% since February 2021, according to the note. “We think there is room for Dow to raise its dividend given its strong cash flows even at depressed parts of the economic cycle,” he said. Zekauskas added that domestic contract polyethylene prices nominally increased in August and could do so again in September, which could benefit Dow. The North America-based company is the largest ethylene/polyethylene producer in the world, the note said. — CNBC’s Michael Bloom contributed to this report.