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Eastman's (EMN) Molecular Recycling Plant Begins Production

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Eastman Chemical Company (EMN - Free Report) has announced that its molecular recycling facility, located in Kingsport, TN, met its initial production goals and is already generating revenues. The company aims to ramp up production at the plant in the coming months, enabling growth in a variety of industries.

Achieving this crucial milestone puts the company on track to generate about $75 million in incremental EBITDA from this facility by 2024.

Eastman's position as a leader in the construction of a circular economy has been strengthened by its demonstration of molecular recycling on this scale. Demand for recycled material of virgin quality from its new factory remains robust.

Eastman's proven polyester renewal process recycles difficult-to-recycle plastic trash that would otherwise end up in a landfill or cremation. The company's method breaks down this trash into molecular building components, which are then reassembled to produce virgin-quality material without sacrificing performance.

Eastman enables the theoretically limitless usage of resources by maintaining these valuable molecules in production in a material-to-material high-yield loop. It can convert waste plastic into virgin quality food contact polyesters while emitting less greenhouse gases than standard processes.

In addition to the recently constructed facility in Kingsport, Eastman intends to invest in two more molecular recycling operations, one in France and another in the United States.

Shares of Eastman have gained 20.3% over the past year against a 5% decline of its industry.

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The company stated that it expects volume increase due to the absence of client inventory destocking in its end markets, with the notable exception of medical and agriculture, which continued to destock in the first quarter of 2024.

EMN projects minor primary demand to increase in several stable end industries, with discretionary end markets remaining steady. It expects to gain from the revenues and earnings generated by its Kingsport methanolysis facility. Taking all of this into account, the company estimates 2024 earnings per share to range between $7.25 and $8.00, with cash from operations of around $1.4 billion.

Zacks Rank & Key Picks

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

Better-ranked stocks in the basic materials space include Denison Mines Corp. (DNN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) .

Denison Mines carrying a Zacks Rank #1 (Strong Buy). DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 96.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology currently carries a Zacks Rank #1. 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 soared 64.8% in the past year.

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 (Buy) 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 77.5% in the past year.


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