Right Mix for Eastman Chemical

Eastman Chemical (EMN - Analyst Report) has a strong fibers business and solid financials. The company had an impressive first quarter 2008, marked by increasing prices, volume gains, and strength in several end markets.

We are also enthused by the company's cost cutting and restructuring programs, in which Eastman plans to sell unprofitable units and close down businesses, particularly in its CASPI segment. The company is likely to benefit from its recent focus on the industrial gasification business.

Thus, we rate shares of EMN a Buy. Accordingly, we have set a new price target of $80.00. Our outlook for the Chemical and Fertilizer industry is positive. Investors should over-weight chemical stocks now. The group is likely to outperform the S&P in the next six months. We should see earnings that are in line with expectations.

Read the full analyst report on EMN