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Eastman Chemical (EMN) Shares Pop 17% in 3 Months: Here's Why
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Eastman Chemical Company’s (EMN - Free Report) shares have rallied 16.8% over the past three months. The company has also outperformed its industry’s decline of 2.9% over the same time frame. Moreover, it has topped the S&P 500’s 10.5% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Working in EMN’s Favor?
Eastman is gaining from its actions to manage costs. It is expected to benefit from lower operating costs from its operational transformation program.
The company was able to offset $1.3 billion in inflation from higher raw material, energy and distribution costs through price increases in 2022. It is expected to reduce manufacturing, supply chain and non-manufacturing costs by more than $200 million for 2023, net of inflation. Pricing initiatives and lower raw material and energy costs are also expected to support the company’s bottom line.
Moreover, Eastman's goal is to increase new business revenues by utilizing its innovation-driven growth strategy. Due to the company's competence in specialty products, it generated around $550 million in new business revenues from innovation in 2022. Sales volumes are expected to be supported by the innovation and market development initiatives.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation. Its operating cash flow more than doubled year over year to $514 million in the third quarter of 2023. The company returned $94 million to shareholders in the third quarter through dividends and share repurchases. Furthermore, it expects to deliver $1.4 billion in operating cash flow in 2023.
The company remains committed to continuing its long history of returning cash to stockholders. EMN, last month, raised its dividend for the 14th straight year. Its board increased the quarterly cash dividend on its common stock from 79 cents to 81 cents per share. The move reflects the board's confidence in the company's ability to deliver solid earnings and maintain its track record of strong cash flow generation.
Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Cabot Corporation (CBT - Free Report) .
Cameco has a projected earnings growth rate of 184% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 18.3% over the past 60 days. The stock is up around 96% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 54% in the past year.
The consensus estimate for Cabot’s current fiscal-year earnings is pegged at $6.58, indicating a year-over-year rise of 22.3%. CBT, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while missed once, with the average earnings surprise being 2.3%. The company’s shares are up around 6% in the past year.
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Eastman Chemical (EMN) Shares Pop 17% in 3 Months: Here's Why
Eastman Chemical Company’s (EMN - Free Report) shares have rallied 16.8% over the past three months. The company has also outperformed its industry’s decline of 2.9% over the same time frame. Moreover, it has topped the S&P 500’s 10.5% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Working in EMN’s Favor?
Eastman is gaining from its actions to manage costs. It is expected to benefit from lower operating costs from its operational transformation program.
The company was able to offset $1.3 billion in inflation from higher raw material, energy and distribution costs through price increases in 2022. It is expected to reduce manufacturing, supply chain and non-manufacturing costs by more than $200 million for 2023, net of inflation. Pricing initiatives and lower raw material and energy costs are also expected to support the company’s bottom line.
Moreover, Eastman's goal is to increase new business revenues by utilizing its innovation-driven growth strategy. Due to the company's competence in specialty products, it generated around $550 million in new business revenues from innovation in 2022. Sales volumes are expected to be supported by the innovation and market development initiatives.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation. Its operating cash flow more than doubled year over year to $514 million in the third quarter of 2023. The company returned $94 million to shareholders in the third quarter through dividends and share repurchases. Furthermore, it expects to deliver $1.4 billion in operating cash flow in 2023.
The company remains committed to continuing its long history of returning cash to stockholders. EMN, last month, raised its dividend for the 14th straight year. Its board increased the quarterly cash dividend on its common stock from 79 cents to 81 cents per share. The move reflects the board's confidence in the company's ability to deliver solid earnings and maintain its track record of strong cash flow generation.
Eastman Chemical Company Price and Consensus
Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote
Stocks to Consider
Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Cabot Corporation (CBT - Free Report) .
Cameco has a projected earnings growth rate of 184% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 18.3% over the past 60 days. The stock is up around 96% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 54% in the past year.
The consensus estimate for Cabot’s current fiscal-year earnings is pegged at $6.58, indicating a year-over-year rise of 22.3%. CBT, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while missed once, with the average earnings surprise being 2.3%. The company’s shares are up around 6% in the past year.