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Eastman Chemical (EMN) Shares Rally 18% in 6 Months: Here's Why
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Eastman Chemical Company’s (EMN - Free Report) shares have popped 17.6% over the past six months. The company has also outperformed its industry’s decline of 7.1% over the same time frame. Moreover, it has topped the S&P 500’s 14.2% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #3 (Hold) 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.
EMN is taking actions to keep its manufacturing and administrative costs in control. It achieved cost savings of around $200 million in 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. Its sales volumes are expected to be supported by the innovation and market development initiatives.
The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. The facility is expected to deliver roughly $75 million of incremental EBITDA growth in 2024.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation with an emphasis on debt reduction. It returned $526 million to shareholders in 2023 through dividends and share repurchases. Furthermore, the company delivered around $1.4 billion in operating cash flow in 2023. It also raised its dividend for the 14th consecutive year.
Better-ranked stocks worth a look in the basic materials space include, Carpenter Technology Corporation (CRS - Free Report) , Alpha Metallurgical Resources Inc. (AMR - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The Zacks Consensus Estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 50% in the past year. CRS 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 Alpha Metallurgical Resources’ current-year earnings has been revised upward by 49.2% in the past 60 days. AMR delivered a trailing four-quarter earnings surprise of roughly 24.8%, on average. Its shares are up around 124% in a year. AMR currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 75% in the past year.
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Eastman Chemical (EMN) Shares Rally 18% in 6 Months: Here's Why
Eastman Chemical Company’s (EMN - Free Report) shares have popped 17.6% over the past six months. The company has also outperformed its industry’s decline of 7.1% over the same time frame. Moreover, it has topped the S&P 500’s 14.2% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #3 (Hold) 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.
EMN is taking actions to keep its manufacturing and administrative costs in control. It achieved cost savings of around $200 million in 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. Its sales volumes are expected to be supported by the innovation and market development initiatives.
The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. The facility is expected to deliver roughly $75 million of incremental EBITDA growth in 2024.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation with an emphasis on debt reduction. It returned $526 million to shareholders in 2023 through dividends and share repurchases. Furthermore, the company delivered around $1.4 billion in operating cash flow in 2023. It also raised its dividend for the 14th consecutive year.
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, Carpenter Technology Corporation (CRS - Free Report) , Alpha Metallurgical Resources Inc. (AMR - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The Zacks Consensus Estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 50% in the past year. CRS 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 Alpha Metallurgical Resources’ current-year earnings has been revised upward by 49.2% in the past 60 days. AMR delivered a trailing four-quarter earnings surprise of roughly 24.8%, on average. Its shares are up around 124% in a year. AMR currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 75% in the past year.