Eastman Chemical Company (EMN), based in Kingsport, Tennessee, is a global leader in specialty materials and chemicals with a market capitalization of $12.2 billion. The company offers a diverse portfolio of innovative products that support industries like automotive, agriculture, healthcare, and consumer goods, contributing to sustainability efforts, improved product performance, and technological progress across multiple sectors.
Shares of this specialty material company have underperformed the broader market over the past year. The stock has gained 29.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 3%. Also, in 2024, EMN is up 17.6% compared to SPX’s 25.2% rise on a YTD basis.
Narrowing the focus, EMN has outperformed the iShares U.S. Basic Materials ETF (IYM). The exchange-traded fund has gained about 13.5% over the past year. Moreover, the ETF’s 6.3% gains on a YTD basis lagged behind the stock’s returns over the same time frame.
Eastman Chemical unveiled its third-quarter earnings on October 31, with shares sliding 3.8% in the next trading session. The company reported adjusted EPS of $2.26, exceeding Wall Street estimates, alongside revenue of $2.5 billion, which also outpaced expectations. However, the dip in share price was attributed to its full-year adjusted EPS forecast of $7.50 to $7.70, with the midpoint falling slightly below the consensus estimate of $7.69.
For the current fiscal year, ending in December, analysts expect EMN’s EPS to grow 19.2% year over year to $7.63 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in all four quarters.
Among the 16 analysts covering EMN stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.”
This configuration is less bullish than a month ago, with seven analysts suggesting a “Strong Buy.”
On Nov. 6, RBC Capital reduced Eastman Chemical's price target from $107 to $105 while maintaining a “Sector-Perform” rating. Following Q3 results, the firm noted incremental benefits from the Kingsport facility but highlighted management's expectation of continued soft end-market demand through year-end.
The mean price target is $115.29, representing a premium of 9.2% compared to EMN’s current price levels. The Street-high price target of $130 suggests an upside potential of 23.1%.
