Dow (DOW) Downgrade: Nonsensical

What is it going to "under perform""? The market? Does he think the The Ratings For Sectors

Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.
Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
Underweight: Industry expected to under perform the relevant broad market benchmark over the next 12months

Now the Individual Company Ratings

Outperform: The stock’s total return is expected to exceed the industry average* by at least 10-15% (or more, depending on perceived risk) over the next 12 months.
Neutral: The stock’s total return is expected to be in line with the industry average* (range of ±10%) over the next 12 months.
Under perform**: The stock’s total return is expected to under perform the industry average* by 10-15% or more over the next 12 months.

So what do we have? The Chemical sector being downgraded to "under perform" means that is will lag the S&P in 2007. Dow’s neutral rating means that is will match that performance plus or minus 10%. Some math is now necessary. Let’s say S%P advances 10% in 2007. This guy is right and the chemical sector "under performs" and only advances 8%. That means that Dow’s neutral rating means that shares will be between $44 and $53 from their current $45. The more the sector lags the market, the more the downside risk. If the chemical sector only advances 1% in 2007, his expectation is shares will trade between $41 to $50.

Here is the best part: "In an effort to achieve a more balanced distribution of stock ratings, the Firm has requested that analysts maintain at least 15% of their rated coverage universe as Under perform. This guideline is subject to change depending on several factors, including general market conditions."

Translation? "We have to put a certain number of firm in a category whether they warrant it or not. A depending what the market does, if we are going to look foolish we reserve the right to arbitrarily change that."

Is anyone getting where i am going with this? He has no idea where shares are going to trade..

Please ignore them…