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Eastman Chemical (EMN) Stock Rallies 40% in 6 Months: Here's Why
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Eastman Chemical Company’s (EMN - Free Report) shares have popped 39.7% over the past six months. The chemical maker has also outperformed its industry’s rise of 32.5% over the same time frame. Moreover, it has topped the S&P 500’s 17.7% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
What’s Favoring the Stock?
Eastman Chemical is gaining from its innovation-driven growth model, cost-management actions and improved demand across its end markets from the coronavirus-led downturn.
The company is also taking an aggressive approach to cost management in the wake of the pandemic. These initiatives include reduction of discretionary spending. Eastman Chemical expects to deliver roughly $150 million of cost savings for full-year 2020 with around $40 million anticipated in the fourth quarter. The company’s cost reduction actions are expected to contribute to its bottom line.
Moreover, the company is seeing a recovery of late across building & construction, tires, automotive and consumer durables markets. In the third quarter of 2020, it witnessed improved demand across its end markets, especially those that are worst hit by the pandemic. The company, in its third-quarter call, said that it entered the fourth quarter with strong momentum.
Eastman Chemical also remains focused on growing new business revenues from innovation. In particular, the company’s Advanced Materials segment has a number of products that are driving new business revenues.
Moreover, Eastman Chemical remains committed to maintain a disciplined approach to capital allocation, with an emphasis on financing its dividend and debt reduction. The company, last month, raised its quarterly dividend by 5% to 69 cents per share. Notably, it hiked its dividend for the 11th consecutive year.
Moreover, the company is taking actions to boost its cash flows. These include reduction of capital expenditure. It expects to generate more than $1 billion of free cash flow for full-year 2020.
Earnings estimates for Eastman Chemical have also been going up over the past two months. The Zacks Consensus Estimate for 2020 has increased around 0.7% while the same for 2021 has gone up 0.8%. The favorable estimate revisions instill investor confidence in the stock.
Other top-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , Impala Platinum Holdings Limited (IMPUY - Free Report) and BHP Group (BHP - Free Report) .
Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 141% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 32% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 25% in a year. It currently carries a Zacks Rank #1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Eastman Chemical (EMN) Stock Rallies 40% in 6 Months: Here's Why
Eastman Chemical Company’s (EMN - Free Report) shares have popped 39.7% over the past six months. The chemical maker has also outperformed its industry’s rise of 32.5% over the same time frame. Moreover, it has topped the S&P 500’s 17.7% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
What’s Favoring the Stock?
Eastman Chemical is gaining from its innovation-driven growth model, cost-management actions and improved demand across its end markets from the coronavirus-led downturn.
The company is also taking an aggressive approach to cost management in the wake of the pandemic. These initiatives include reduction of discretionary spending. Eastman Chemical expects to deliver roughly $150 million of cost savings for full-year 2020 with around $40 million anticipated in the fourth quarter. The company’s cost reduction actions are expected to contribute to its bottom line.
Moreover, the company is seeing a recovery of late across building & construction, tires, automotive and consumer durables markets. In the third quarter of 2020, it witnessed improved demand across its end markets, especially those that are worst hit by the pandemic. The company, in its third-quarter call, said that it entered the fourth quarter with strong momentum.
Eastman Chemical also remains focused on growing new business revenues from innovation. In particular, the company’s Advanced Materials segment has a number of products that are driving new business revenues.
Moreover, Eastman Chemical remains committed to maintain a disciplined approach to capital allocation, with an emphasis on financing its dividend and debt reduction. The company, last month, raised its quarterly dividend by 5% to 69 cents per share. Notably, it hiked its dividend for the 11th consecutive year.
Moreover, the company is taking actions to boost its cash flows. These include reduction of capital expenditure. It expects to generate more than $1 billion of free cash flow for full-year 2020.
Earnings estimates for Eastman Chemical have also been going up over the past two months. The Zacks Consensus Estimate for 2020 has increased around 0.7% while the same for 2021 has gone up 0.8%. The favorable estimate revisions instill investor confidence in the stock.
Eastman Chemical Company Price and Consensus
Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , Impala Platinum Holdings Limited (IMPUY - Free Report) and BHP Group (BHP - Free Report) .
Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 141% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 32% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 25% in a year. It currently carries a Zacks Rank #1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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