Back to top

Analyst Blog

Shares of Eastman Chemical Company (EMN - Analyst Report) hit a new 52-week high of $85.11 on Feb 24 and eventually closed at $84.09. The shares of this chemical company have been on the rise since it reported solid fourth-quarter 2013 earnings on Jan 30.

Eastman Chemical's shares have recorded a one-year return of roughly 19%. The company's long-term estimated earnings per share (EPS) growth rate is 8.3%. Average volume of shares traded over the last three months was roughly 1,719.5K.

Growth Drivers

Eastman Chemical posted strong fourth-quarter results on strength across its Additives and Functional Products, Advanced Materials and Fibres divisions. The company’s adjusted earnings (from continuing operations) of $1.35 per share for the reported quarter topped the Zacks Consensus Estimate by 10 cents and exceeded the year-ago adjusted earnings of $1.19 per share.

On a reported basis, Eastman Chemical’s earnings (from continuing operation) came in at $2.22 per share compared with a loss of 35 cents in the year-ago quarter.

Revenues rose roughly 4% year over year to $2,265 million in the fourth quarter, beating the Zacks Consensus Estimate of $2,232 million. Revenues were driven by higher sales volumes across the Additives and Functional Products, Advanced Materials and Fibers segments. Eastman Chemical saw higher sales across all geographic regions in the fourth quarter.

The acquisition of Solutia is a strategic fit for Eastman Chemical, as it expanded the company’s foothold in emerging markets, including China, by establishing a more diverse and sustainable product portfolio. It also recognizes the potential for meaningful revenue synergies by leveraging technology and business capabilities and overlapping end markets of both companies, particularly automotive and architecture.

Eastman Chemical has also agreed to acquire the assets of BP’s global aviation turbine engine oil business in Jan 2014. The acquisition will enable the company to better meet the global aviation industry’s needs when its aviation hydraulic fluids will be added with the acquired fluids product portfolio of BP. The company expects the transaction to immediately add to its full-year 2014 earnings.

Eastman Chemical is committed to maintaining a strong balance sheet and returning excess cash to shareholders. The company’s Board has approved an additional $1 billion repurchase of its common stock on Feb 20. Moreover, it has raised its quarterly dividend by 17% to 35 cents per share from the previous payout of 30 cents per share in Dec 2013.

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Other companies in the chemical industry worth considering include Methanex Corp. (MEOH - Analyst Report), Northern Technologies International Corp. and PPG Industries Inc. (PPG - Analyst Report). While both Methanex and Northern Technologies carry a Zacks Rank #1 (Strong Buy), PPG holds a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.60 +8.62%
CENTURY ALU… CENX 26.45 +5.88%
BANCO DO BR… BDORY 16.39 +5.54%
TESLA MOTOR… TSLA 282.87 +4.88%
CANADIAN SO… CSIQ 37.04 +4.51%