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Eastman Chemical Hits New 52-Week High on Bright Prospects

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Shares of chemical maker, Eastman Chemical (EMN - Free Report) touched a fresh 52-week high of $86.79 on Aug 31, before pulling back to eventually close the day at $86.20.

Eastman Chemical has a market cap of roughly $12.5 billion and average volume of shares traded in the last three months is around 1,035.4K. The company has an expected long-term earnings per share growth of around 7.9%.

Eastman Chemical has outperformed the industry over a year. The company’s shares have moved up 23.3% over this period, compared with roughly 16.7% gain recorded by the industry. 
 
Driving Factors

Eastman Chemical saw higher profits in the second-quarter 2017, aided by its cost management actions, disciplined capital allocation and growth of high-margin products.

The company expects to drive growth on the back of innovation and high margin products amid an uncertain global business environment. Eastman Chemical believes that disciplined capital allocation and aggressive cost management policies should contribute to earnings growth and help to offset challenges faced by the company in Fibers and ethylene pricing.

Factoring in strong first-half results, the company now expects adjusted earnings per share for 2017 to grow 10-12% year over year, up from its earlier view of 8-12%.

Eastman Chemical remains focused on cost-cutting and productivity actions. The company is aims to achieve $100 million of cost savings in 2017.

The company remains committed to reduce debt and boost shareholder returns. Eastman Chemical returned around $325 million to shareholders during first-half 2017. It expects to deliver strong earnings growth and generate solid free cash flow (of around $1 billion) in 2017.

Eastman Chemical is also gaining from synergies of acquisitions, especially Taminco Corporation. The Taminco acquisition has provided attractive cost and revenue synergy opportunities.
 
Eastman Chemical Company Price and Consensus
 

Eastman Chemical Company Price and Consensus | Eastman Chemical Company Quote

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

Stocks to Consider

Some better-ranked stocks in the chemical space are The Chemours Company (CC - Free Report) , Kronos Worldwide (KRO - Free Report) and Akzo Nobel N.V. (AKZOY - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth of 15.5%.

Kronos Worldwide has an expected long-term earnings growth of 5%.

Akzo Nobel has an expected long-term earnings growth of 11.1%.

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