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Eastman Chemical (EMN) to Increase Price of Plasticizers

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Eastman Chemical Company (EMN - Free Report) will increase the selling prices of Plasticizers. The price hike will be effective from Jul 1, 2018 or as contracts permit.

The company will increase the prices of Benzoflex and Versafix Plasticizers by 5 cents per lb each in North and Latin America. Eastman Chemical is taking appropriate pricing actions in response to escalated operating costs including rising raw material costs and freight charges.   

Eastman Chemical’s shares have moved up 31.7% over the past year, outperforming the 9.8% growth of the industry it belongs to.



Eastman Chemical raised its earnings growth expectations for 2018 based on strong first-quarter results. The company now expects adjusted earnings per share growth for 2018 to be 10-14% year over year, up from its prior view of 8-12%. The company also noted that it will remain committed to offset volatility in raw material and energy prices, especially olefins.

Eastman Chemical’s high margin products and its aggressive cost management actions are likely to continue accelerating its earnings. Its focus on productivity and cost-cutting actions is helping it to offset raw material cost inflation and other cost headwinds. The company expects to deliver $100 million of cost savings in 2018 under its cost-reduction program.

The company should also gain from its strategic acquisitions, especially Taminco Corporation. The buyout has strengthened the company’s foothold in attractive niche end-markets, including food, feed and agriculture where it has a strong presence. The acquisition has also provided attractive cost and revenue-synergy opportunities.

Moreover, Eastman Chemical is committed to boosting shareholder returns leveraging strong free cash flow. The company returned roughly $180 million to shareholders during the first quarter. The company expects to generate solid free cash flow (more than $1.1 billion) in 2018.

Eastman Chemical Company Price and Consensus

Zacks Rank & Stocks to Consider

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

Some better-ranked companies in the basic materials space are FMC Corp. (FMC - Free Report) , Celanese Corp. (CE - Free Report) and The Chemours Company (CC - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp has an expected long-term earnings growth rate of 16.4%. Its shares have gained around 15.5% over a year.

Celanese has an expected long-term earnings growth rate of 8.9%. Its shares have moved up around 32.8% over a year.

Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained around 20.6% over a year.

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