Eastern Company (EML) AI Stock Analysis

• Market Cap: $121.68M
• Dividend Yield: 2.24%
• Average Volume (3M): 11.46K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.86
• Revenue Growth: -8.54%
• EPS Growth: -68.18%
• Country: US
• Employees: 1,246
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 0.31
• Shares Outstanding: 6,041,767
• 10 Day Avg. Volume: 16,353
• 30 Day Avg. Volume: 11,455
• PEG Ratio: -0.14
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 24.36
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 0.68
• Enterprise Value/Gross Profit: 3.05
• Enterprise Value/Ebitda: 10.07
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.56
• Revenue Forecast (FY): $293.48M

• Rating: 51 Neutral
• Price Target: $21.00 ▲(6.65% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is held back primarily by weak and volatile cash flow and inconsistent profitability/statement quality signals. Offsetting this are a generally neutral technical setup and a cautiously improving operational narrative from the latest earnings call (cost actions, liquidity, and sequential improvement), while valuation appears fair rather than clearly compelling.

Positive Factors

Tariff exposure mitigation

Neutralizing ~$10M of tariff exposure is a durable operational improvement: it reduces ongoing cost volatility, protects gross margins under adverse trade environments, and reflects structural supply‑chain/pricing adjustments that should sustain margin resilience over multiple quarters.

Asia regional growth

Consistent 25% YoY growth in Asia indicates successful commercial expansion and diversification of end markets. Dedicated sales resources and regional traction can provide a lasting growth channel, lowering dependence on weak domestic markets and supporting stable revenue and margin improvement over time.

Improved liquidity and leverage

Securing a five‑year $100M revolver with meaningful availability and improving net leverage to 1.35x materially strengthens the capital structure. This provides a multi‑quarter runway for working capital, execution of cost actions, and selective M&A while reducing short‑term refinancing risk.

Negative Factors

Negative and volatile cash flow

Sharp deterioration to materially negative free cash flow in the latest period signals weak cash conversion and working‑capital pressure. Persistent negative FCF limits reinvestment, constrains dividend/buyback capacity, and raises refinancing or covenant risk if end‑market weakness persists.

Top‑line decline and backlog pressure

A 9% annual revenue decline and steeper quarterly drops reflect sustained demand weakness in core end markets. Lower shipments and a shrinking backlog reduce operating leverage and make it harder to restore scale economies, slowing recovery of margins and long‑term growth potential.

Inconsistent profitability and margin compression

Significant declines in adjusted EBITDA and net income underscore volatile profitability. Swinging between losses and thin profits, plus compressed margins, impair forecasting and investor confidence, and suggest structural margin headwinds beyond one‑time items absent sustained revenue recovery.

Eastern Company Business Overview & Revenue Model

Company Description

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. It offers turnkey returnable packaging solutions that are used in the assembly process of vehicles, aircraft, and durable goods, as well as in the production process of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industry. It also offers rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles, as well as development and program management services for custom electromechanical and mechanical systems; designs and manufactures proprietary vision technology for original equipment manufacturers (OEMs) and aftermarket applications; and provides aftermarket components to the heavy-duty truck market. The Eastern Company was founded in 1858 and is based in Naugatuck, Connecticut.

How the Company Makes Money

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Eastern Company Financial Statement Overview

Summary

Income statement quality is mixed (choppy revenue, swing from loss to thin profit, and inconsistencies across profit measures). Balance sheet leverage looked improved in mid-years but the latest period has comparability uncertainty. Cash flow is the main concern: recent operating cash flow and free cash flow deteriorated sharply, raising near-term cash-conversion risk.

Income Statement

Revenue has been choppy, with a modest decline in the latest annual period (2026) after growth in 2024 and declines in 2023 and 2020, pointing to limited top-line momentum. Profitability is mixed: gross margin has been relatively steady in the low-to-mid 20% range, but bottom-line results have swung from solid profits (2021–2023) to a loss in 2024 and a return to a thin profit in 2026 (~3% net margin). The latest annual period shows an unusually large disconnect between operating profit and other profit measures (EBIT vs. EBITDA/net income), which raises quality/consistency concerns in operating performance presentation.

Balance Sheet

Leverage appears moderate in most annual periods, with debt-to-equity generally improving versus 2020 (near 1.0) to roughly the mid-0.4s in 2023–2024, suggesting a healthier capital structure. However, the latest annual period (2026) shows debt and equity figures that are not comparable in scale to prior years, creating uncertainty around the true leverage trend. Returns to shareholders have also been inconsistent, including a negative return in 2024 alongside the net loss.

Cash Flow

Cash generation is volatile. Operating cash flow was strong in 2022–2024 but negative in 2021, and the latest annual period (2026) shows extremely low operating cash flow with materially negative free cash flow, implying weak cash conversion and reinvestment/working-capital pressure. Free cash flow was solidly positive in 2022–2024 (especially 2023), but the sharp deterioration in 2026 and the large negative free cash flow relative to net income indicate elevated near-term cash-flow risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	248.97M	272.75M	258.86M	279.27M	246.52M
Gross Profit	56.39M	67.27M	61.77M	58.62M	56.77M
EBITDA	16.69M	25.68M	23.26M	23.91M	28.06M
Net Income	5.12M	-8.53M	8.59M	12.30M	9.35M
Balance Sheet
Total Assets	216.68M	235.31M	252.04M	261.52M	266.33M
Cash, Cash Equivalents and Short-Term Investments	7.41M	16.06M	9.29M	10.19M	6.17M
Total Debt	53.86M	56.64M	62.08M	76.40M	75.12M
Total Liabilities	92.03M	114.62M	119.56M	134.91M	151.73M
Stockholders Equity	124.65M	120.69M	132.48M	126.61M	114.60M
Cash Flow
Free Cash Flow	4.90M	10.84M	20.05M	7.10M	-5.74M
Operating Cash Flow	8.87M	20.55M	26.48M	10.46M	-2.02M
Investing Cash Flow	-508.92K	-8.47M	-5.43M	5.09M	12.62M
Financing Cash Flow	-16.30M	-4.82M	-22.90M	-11.78M	-20.27M

Eastern Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EML, the sentiment is Positive. The current price of 19.69 is above the 20-day moving average (MA) of 19.05, above the 50-day MA of 18.63, and below the 200-day MA of 21.09, indicating a neutral trend. The MACD of 0.48 indicates Negative momentum. The RSI at 60.33 is Neutral, neither overbought nor oversold. The STOCH value of 77.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EML.

Eastern Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TKR	72 Outperform	$6.83B	20.35	9.35%	1.61%	-1.01%	-12.13%
KMT	65 Neutral	$2.75B	16.15	8.61%	2.74%	-2.63%	-4.46%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SWK	62 Neutral	$10.80B	28.82	4.47%	4.42%	-1.40%	―
HLMN	61 Neutral	$1.58B	44.53	3.11%	―	4.47%	345.07%
CVR	59 Neutral	$13.36M	37.35	-16.20%	0.84%	-12.32%	0.17%
EML	51 Neutral	$121.68M	23.31	5.77%	2.24%	-8.54%	-68.18%

Eastern Company Corporate Events

Eastern Company Announces Director Retirements and Governance Changes

On February 25, 2026, Eastern Company directors Charles W. Henry and Michael J. Mardy notified the board that they would retire and not stand for re-election at the 2026 annual shareholders’ meeting, with both to serve until their terms end at that meeting, and the board decided to shrink its size from eight to six members. The board also amended and restated the company’s bylaws on the same date, easing shareholder thresholds to amend bylaws and call special meetings, revising disclosure and timing rules for shareholder proposals and director nominations, clarifying the non-officer status and flexible duties of the board chair, and making various technical updates to align governance with current regulatory and market practices.

MainPoint1: Eastern Company will see two long-serving directors retire at the 2026 annual meeting, after which its board will be reduced from eight members to six.
MainPoint2: The company overhauled its bylaws on February 25, 2026, expanding shareholder rights on amendments and special meetings and tightening procedures for proposals and director nominations.

The most recent analyst rating on (EML) stock is a Hold with a $19.00 price target. To see the full list of analyst forecasts on Eastern Company stock, see the EML Stock Forecast page.