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Eastman Chemical (EMN) Stock Up 12% in 3 Months: Here's Why
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Eastman Chemical Company’s (EMN - Free Report) shares are up 12.5% over the past three months. The company has also topped its industry’s rise of 0.4% over the same time frame.
The chemical maker has a market cap of roughly $9.3 billion and average volume of shares traded in the last three months is around 1,659.5K.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
What’s Going in EMN’s Favor?
Forecast-topping earnings performance in the first quarter of 2020 and upbeat prospects have contributed to the gain in the company’s shares. Eastman Chemical’s profits for the first quarter climbed 23% year over year to $258 million or $1.89 per share. Adjusted earnings of $2.03 per share rose from $1.77 in the year ago-quarter and topped the Zacks Consensus Estimate of $1.72.
Eastman Chemical is benefiting from its cost-management actions, innovation-driven growth model and synergies of acquisitions amid a difficult business environment. Its cost reduction actions and growth in high-margin innovation products are expected to contribute to its earnings in 2020.
The company is focused on productivity and cost-cutting actions in the wake of a challenging environment. In response to the coronavirus pandemic, it has significantly increased its cost reduction target, which is forecast to be roughly $150 million of net savings in 2020. These cost actions include reduction of discretionary spending.
Moreover, Eastman Chemical is focused on growing new business revenues from innovation. It expects to generate roughly $500 million of new business revenues in 2020. In particular, the company’s Advanced Materials unit has a number of products that are driving new business revenues.
Eastman Chemical is also gaining from synergies of acquisitions. The acquisition of Marlotherm heat transfer fluids manufacturing assets in Germany has allowed the company to boost its heat transfer fluids product offerings to customers globally. Moreover, the acquisition of Spain-based cellulosic yarn producer, INACSA reinforces the growth of the company’s textiles innovation products like Naia cellulosic yarn.
Moreover, Eastman Chemical remains focused on maintaining a disciplined approach to capital allocation, with an emphasis on financing its dividend and debt reduction. It expects to reduce debt by more than $400 million in 2020. The company has also taken steps to boost its cash flows. These include reduction of capital expenditure by around $100 million to $325-375 million. The company also expects working capital to be a source of more than $250 million of cash flows this year.
Better-ranked stocks worth considering in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , The Scotts Miracle-Gro Company (SMG - Free Report) and Barrick Gold Corporation (GOLD - Free Report) .
Agnico Eagle has a projected earnings growth rate of 75.3% for the current year. The company’s shares have rallied roughly 42% in a year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Scotts Miracle-Gro has an expected earnings growth rate of 17.7% for the current fiscal year. The company’s shares have gained roughly 57% in the past year. It currently carries a Zacks Rank #2 (Buy).
Barrick Gold has a projected earnings growth rate of 64.7% for the current year. The company’s shares have surged around 89% in a year. It currently has a Zacks Rank #2.
5 Stocks to Soar Past the Pandemic: In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.
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Eastman Chemical (EMN) Stock Up 12% in 3 Months: Here's Why
Eastman Chemical Company’s (EMN - Free Report) shares are up 12.5% over the past three months. The company has also topped its industry’s rise of 0.4% over the same time frame.
The chemical maker has a market cap of roughly $9.3 billion and average volume of shares traded in the last three months is around 1,659.5K.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
What’s Going in EMN’s Favor?
Forecast-topping earnings performance in the first quarter of 2020 and upbeat prospects have contributed to the gain in the company’s shares. Eastman Chemical’s profits for the first quarter climbed 23% year over year to $258 million or $1.89 per share. Adjusted earnings of $2.03 per share rose from $1.77 in the year ago-quarter and topped the Zacks Consensus Estimate of $1.72.
Eastman Chemical is benefiting from its cost-management actions, innovation-driven growth model and synergies of acquisitions amid a difficult business environment. Its cost reduction actions and growth in high-margin innovation products are expected to contribute to its earnings in 2020.
The company is focused on productivity and cost-cutting actions in the wake of a challenging environment. In response to the coronavirus pandemic, it has significantly increased its cost reduction target, which is forecast to be roughly $150 million of net savings in 2020. These cost actions include reduction of discretionary spending.
Moreover, Eastman Chemical is focused on growing new business revenues from innovation. It expects to generate roughly $500 million of new business revenues in 2020. In particular, the company’s Advanced Materials unit has a number of products that are driving new business revenues.
Eastman Chemical is also gaining from synergies of acquisitions. The acquisition of Marlotherm heat transfer fluids manufacturing assets in Germany has allowed the company to boost its heat transfer fluids product offerings to customers globally. Moreover, the acquisition of Spain-based cellulosic yarn producer, INACSA reinforces the growth of the company’s textiles innovation products like Naia cellulosic yarn.
Moreover, Eastman Chemical remains focused on maintaining a disciplined approach to capital allocation, with an emphasis on financing its dividend and debt reduction. It expects to reduce debt by more than $400 million in 2020. The company has also taken steps to boost its cash flows. These include reduction of capital expenditure by around $100 million to $325-375 million. The company also expects working capital to be a source of more than $250 million of cash flows this year.
Eastman Chemical Company Price and Consensus
Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , The Scotts Miracle-Gro Company (SMG - Free Report) and Barrick Gold Corporation (GOLD - Free Report) .
Agnico Eagle has a projected earnings growth rate of 75.3% for the current year. The company’s shares have rallied roughly 42% in a year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Scotts Miracle-Gro has an expected earnings growth rate of 17.7% for the current fiscal year. The company’s shares have gained roughly 57% in the past year. It currently carries a Zacks Rank #2 (Buy).
Barrick Gold has a projected earnings growth rate of 64.7% for the current year. The company’s shares have surged around 89% in a year. It currently has a Zacks Rank #2.
5 Stocks to Soar Past the Pandemic: In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.
See the 5 high-tech stocks now>>