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Eastern Company
(NASDAQ:EML)
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Rating:62Neutral
Price Target:
$28.00
▲(15.61% Upside)
Action:Reiterated
Date:06/19/26
The score is primarily supported by improved financial health (stronger balance sheet and rebounding cash generation) and constructive technical momentum (price above major moving averages). These positives are offset by expensive valuation (high P/E) and mixed near-term fundamentals from the latest earnings call, where operational issues and margin compression are expected to weigh through the first half of 2026.
Positive Factors
Balance-sheet strength
Material deleveraging and sizable available revolver capacity increase financial flexibility for durable needs: funds for automation, ERP rollouts, modest M&A, or continued dividends/repurchases without stressing liquidity. Stronger capital structure lowers refinancing and covenant risk over months.
Negative Factors
Declining revenue trend
Persistent top-line contraction constrains operating leverage and limits ability to absorb fixed costs. If revenue weakness persists across end markets like returnable packaging, the company may struggle to restore margins and sustain profitable growth absent new wins or higher volumes.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength
Material deleveraging and sizable available revolver capacity increase financial flexibility for durable needs: funds for automation, ERP rollouts, modest M&A, or continued dividends/repurchases without stressing liquidity. Stronger capital structure lowers refinancing and covenant risk over months.
Read all positive factors
Eastern Company (EML) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$154.44M
Dividend Yield1.73%
Average Volume (3M)11.46K
Price to Earnings (P/E)19.0
Beta (1Y)0.80
Revenue Growth-13.66%
EPS Growth-33.94%
CountryUS
Employees1,239
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)1.34
Shares Outstanding6,017,558
10 Day Avg. Volume16,353
30 Day Avg. Volume11,455
Financial Highlights & Ratios
PEG Ratio-0.14
Price to Book (P/B)0.96
Price to Sales (P/S)0.48
P/FCF Ratio24.36
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.56
Revenue Forecast (FY)$293.48M
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 North America. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles...
How the Company Makes Money
Eastern Company makes money primarily by selling manufactured products to business customers. Key revenue streams include: (1) Industrial Hardware and Security Products: revenue from the sale of industrial hardware (such as latches, hinges, locks,...
Eastern Company Earnings Call Summary
Earnings Call Date:Aug 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call presents a cautiously optimistic outlook: management highlighted meaningful improvements in backlog (+45% YoY), sequential operational metrics, a substantial improvement in cash generation, disciplined strategic acquisitions expanding into aerospace & defense, and restored margin discipline (Big 3 issues addressed). Offsetting these positives are continued year‑over‑year revenue and adjusted EBITDA declines, lower adjusted EPS excluding the acquisition gain, near‑term margin drag from newly acquired businesses and tariff/mix headwinds. Management’s emphasis on backlog conversion, liquidity, and execution leads to confidence in a stronger second half, making the tone constructive despite near‑term profit pressures.Positive Updates
Backlog Growth and Improved Visibility
Backlog increased to $126.2 million, up $39.1 million or 45% year-over-year (from $87.1M a year ago) and up from $82.2M at the end of Q1; backlog increased across every business with notable sequential gains at Velvac (+29%) and Eberhard (+19%). Management expects the majority of current backlog to convert to revenue in the second half of 2026.
Negative Updates
Revenue Decline Year‑over‑Year
Net sales from continuing operations declined 11.9% year‑over‑year to $61.8 million in Q2 2026 from $70.2 million in Q2 2025; declines were driven by lower shipments of truck mirror assemblies ($5.7M), returnable transport packaging ($3.4M) and latch and handle assemblies ($0.9M).
Read all updates
Q2-2026 Updates
Positive
Negative
Backlog Growth and Improved Visibility
Backlog increased to $126.2 million, up $39.1 million or 45% year-over-year (from $87.1M a year ago) and up from $82.2M at the end of Q1; backlog increased across every business with notable sequential gains at Velvac (+29%) and Eberhard (+19%). Management expects the majority of current backlog to convert to revenue in the second half of 2026.
Read all positive updates
Company Guidance
Management said Eastern enters H2 2026 with materially improved visibility and expects the majority of its $126.2 million backlog (up $39.1M or 45% YoY and up from $82.2M at Q1) to convert to revenue over the balance of the year, driving sequential improvements in sales, gross margin and adjusted EBITDA. Q2 results included net sales of $61.8M (down 11.9% YoY), gross margin of 20.6% ($12.8M) versus 23.3% ($16.4M) a year ago, adjusted EBITDA of $3.4M (down ~49% from $6.7M), adjusted net income of $0.9M ($0.15/sh) versus $3.5M ($0.57/sh) prior, and GAAP net income of $5.6M ($0.94/sh) which included a $6.5M one‑time bargain purchase gain from the June 1 acquisitions of Crown Precision and Sungear (together adding roughly $18–19M backlog and a near‑term run rate management pegs at about $5–6M/quarter or ~ $20M/year, with a target gross margin of 20–30% over time but some near‑term margin drag from inventory step‑up). Management highlighted sequential backlog gains at Velvac (+29%) and Eberhard (+19%), expects heavy‑truck build rates to continue improving (analyst cited ~26% H2 vs H1), and noted improved cash generation ($12.0M cash from ops in first six months vs $1.9M prior), cash $15.1M, inventories $66.0M, AR $36.8M, long‑term debt $41.7M, $59M available on the $100M revolver, paid a $0.11 quarterly dividend, repurchased ~19,529 shares in Q2 (H1 >40k; 256k remaining authorization) and invested $1.5M in capex YTD.Eastern Company Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
71
Positive
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 234.37M | 248.97M | 272.75M | 258.86M | 279.27M | 246.52M |
| Gross Profit | 49.00M | 56.39M | 67.27M | 61.77M | 58.62M | 56.77M |
| EBITDA | 19.25M | 13.86M | 25.68M | 23.26M | 23.91M | 28.06M |
| Net Income | 8.04M | 5.12M | -8.53M | 8.59M | 12.30M | 9.35M |
Balance Sheet | ||||||
| Total Assets | 245.12M | 216.68M | 235.31M | 252.04M | 261.52M | 266.33M |
| Cash, Cash Equivalents and Short-Term Investments | 15.14M | 7.41M | 16.06M | 9.29M | 10.19M | 6.17M |
| Total Debt | 61.53M | 53.86M | 60.24M | 62.08M | 76.40M | 82.62M |
| Total Liabilities | 115.13M | 92.03M | 114.62M | 119.56M | 134.91M | 151.73M |
| Stockholders Equity | 129.99M | 124.65M | 120.69M | 132.48M | 126.61M | 114.60M |
Cash Flow | ||||||
| Free Cash Flow | 15.14M | 4.90M | 10.84M | 20.05M | 7.10M | -5.74M |
| Operating Cash Flow | 18.99M | 8.87M | 20.55M | 26.48M | 10.46M | -2.02M |
| Investing Cash Flow | -11.87M | -508.92K | -8.47M | -5.43M | 5.09M | 12.62M |
| Financing Cash Flow | -1.33M | -16.30M | -4.82M | -22.90M | -11.78M | -20.27M |
Eastern Company Technical Analysis
Positive
24.22
Price Trends
24.38
Positive
22.79
Positive
20.89
Positive
Market Momentum
0.18
Negative
56.00
Neutral
50.90
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 24.22 is below the 20-day moving average (MA) of 24.55, below the 50-day MA of 24.38, and above the 200-day MA of 20.89, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 56.00 is Neutral, neither overbought nor oversold. The STOCH value of 50.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EML.
Eastern Company Risk Analysis
Eastern Company disclosed 1 risk factors in its most recent earnings report. Eastern Company reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Eastern Company Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $20.93B | 20.26 | 17.41% | 2.34% | 4.02% | 4.39% | |
72 Outperform | $9.10B | 35.98 | 8.13% | 1.00% | 5.45% | -16.03% | |
68 Neutral | $15.44B | 25.02 | 6.90% | 3.64% | 0.57% | 29.85% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $154.44M | 19.03 | 6.39% | 1.82% | -13.66% | -33.94% | |
59 Neutral | $1.71B | 39.89 | 3.36% | ― | 6.47% | 89.75% | |
58 Neutral | $2.32B | 6.95 | 10.46% | 2.27% | 19.82% | 272.31% |
* Industrials Sector Average
EML
Eastern Company
25.41
3.29
14.89%
KMT
Kennametal
31.22
10.85
53.28%
SNA
Snap-on
403.56
89.03
28.31%
SWK
Stanley Black & Decker
102.07
30.78
43.18%
TKR
Timken Company
133.50
57.74
76.22%
HLMN
Hillman Solutions
8.70
-1.00
-10.31%
Eastern Company Corporate Events
Executive/Board ChangesShareholder Meetings
Eastern Company shareholders back board, pay, and auditor
Positive
May 8, 2026
On May 6, 2026, The Eastern Company held its 2026 Annual Meeting of Shareholders, where investors elected six directors—Frederick D. DiSanto, John W. Everets, Chan Galbato, James Mitarotonda, Peggy B. Scott, and Ryan A. Schroeder—to on...
Business Operations and StrategyExecutive/Board Changes
Eastern Company Refreshes Board Committee Leadership Structure
Positive
May 8, 2026
On May 6, 2026, The Eastern Company’s board of directors approved a new slate of committee assignments to take effect immediately after the 2026 annual meeting of shareholders. The board designated Peggy B. Scott to chair the Audit and Envir...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.