We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold Onto Eastman Chemical Stock for Now
Read MoreHide Full Article
Eastman Chemical Company (EMN - Free Report) is benefiting from cost-cutting and productivity actions as well as its innovation-driven growth model amid challenges from soft demand in certain markets.
Shares of EMN are up 22.8% over the past year compared with the Zacks Chemicals Diversified industry’s rise of 4.4%.
Image Source: Zacks Investment Research
Let’s find out why EMN stock is worth retaining at the moment.
Eastman Chemical Gains on Cost Actions & Innovation
Eastman is gaining from its actions to manage costs. It is expected to benefit from lower operating costs from its operational transformation program in 2024.
EMN is taking action 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. The company plans to maintain pricing discipline and improve asset utilization throughout 2024.
Eastman aims to increase new business revenues by utilizing its innovation-driven growth strategy. Innovation and market development initiatives are expected to support its sales volumes. Its specialty portfolio is expected to drive sales growth across key end markets such as consumer durables, building & construction and transportation.
The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. It anticipates a $20-$30 million of incremental EBITDA contribution from the Kingsport facility on a year-over-year basis.
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. It also raised its dividend for the 14th consecutive year. EMN expects to repurchase shares worth around $300 million in 2024. It expects to deliver around $1.3 billion in operating cash flow in 2024.
Demand Weakness a Concern for EMN Stock
EMN is exposed to headwinds from weak demand in certain markets. It is seeing soft demand in building & construction and cautious customer behavior in consumer durables and electronics. Demand in building & construction remains sluggish in most regions.
While Eastman Chemical is seeing an end of customer inventory de-stocking across most of its end markets, the same is expected to continue in medical applications over the near term. Weaker demand is expected to adversely impact its performance in the fourth quarter of 2024.
The Zacks Consensus Estimate for Methanex’s current-year earnings has increased by 20.7% in the past 60 days. MEOH beat the consensus estimate in each of the last four quarters with the average surprise being 101%. Its shares have gained roughly 11% in the past year.
The Zacks Consensus Estimate for Axalta Coating’s current year earnings is pegged at $2.15, indicating a rise of 36.9% from year-ago levels. The Zacks Consensus Estimate for AXTA’s current year earnings has increased 3.9% in the past 60 days. The stock has rallied around 26% in the past year.
Ingevity beat the consensus estimate in three of the last four quarters while missed once. In this timeframe, it delivered an earnings surprise of 95.4%, on average. NGVT’s shares have gained roughly 24% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Hold Onto Eastman Chemical Stock for Now
Eastman Chemical Company (EMN - Free Report) is benefiting from cost-cutting and productivity actions as well as its innovation-driven growth model amid challenges from soft demand in certain markets.
Shares of EMN are up 22.8% over the past year compared with the Zacks Chemicals Diversified industry’s rise of 4.4%.
Image Source: Zacks Investment Research
Let’s find out why EMN stock is worth retaining at the moment.
Eastman Chemical Gains on Cost Actions & Innovation
Eastman is gaining from its actions to manage costs. It is expected to benefit from lower operating costs from its operational transformation program in 2024.
EMN is taking action 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. The company plans to maintain pricing discipline and improve asset utilization throughout 2024.
Eastman aims to increase new business revenues by utilizing its innovation-driven growth strategy. Innovation and market development initiatives are expected to support its sales volumes. Its specialty portfolio is expected to drive sales growth across key end markets such as consumer durables, building & construction and transportation.
The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. It anticipates a $20-$30 million of incremental EBITDA contribution from the Kingsport facility on a year-over-year basis.
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. It also raised its dividend for the 14th consecutive year. EMN expects to repurchase shares worth around $300 million in 2024. It expects to deliver around $1.3 billion in operating cash flow in 2024.
Demand Weakness a Concern for EMN Stock
EMN is exposed to headwinds from weak demand in certain markets. It is seeing soft demand in building & construction and cautious customer behavior in consumer durables and electronics. Demand in building & construction remains sluggish in most regions.
While Eastman Chemical is seeing an end of customer inventory de-stocking across most of its end markets, the same is expected to continue in medical applications over the near term. Weaker demand is expected to adversely impact its performance in the fourth quarter of 2024.
Eastman Chemical Company Price and Consensus
Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote
EMN’s Zacks Rank & Other Key Picks
EMN currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Basic Materials space are Methanex Corporation (MEOH - Free Report) , Axalta Coating Systems Ltd. (AXTA - Free Report) and Ingevity Corporation (NGVT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Methanex’s current-year earnings has increased by 20.7% in the past 60 days. MEOH beat the consensus estimate in each of the last four quarters with the average surprise being 101%. Its shares have gained roughly 11% in the past year.
The Zacks Consensus Estimate for Axalta Coating’s current year earnings is pegged at $2.15, indicating a rise of 36.9% from year-ago levels. The Zacks Consensus Estimate for AXTA’s current year earnings has increased 3.9% in the past 60 days. The stock has rallied around 26% in the past year.
Ingevity beat the consensus estimate in three of the last four quarters while missed once. In this timeframe, it delivered an earnings surprise of 95.4%, on average. NGVT’s shares have gained roughly 24% in the past year.