Eastern Company (EML) AI Stock Analysis

• Market Cap: $119.13M
• Dividend Yield: 2.24%
• Average Volume (3M): 10.89K
• Price to Earnings (P/E): 22.9
• Beta (1Y): 1.00
• Revenue Growth: -8.54%
• EPS Growth: -68.18%
• Country: US
• Employees: 1,246
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 0.13
• Shares Outstanding: 6,068,650
• 10 Day Avg. Volume: 14,328
• 30 Day Avg. Volume: 10,895
• PEG Ratio: 0.16
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.60
• P/FCF Ratio: 15.21
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 3.37
• Enterprise Value/Ebitda: 11.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.98
• Revenue Forecast (FY): $274.28M

• Rating: 64 Neutral
• Price Target: $21.50 ▲(9.19% Upside)

Eastern Company's overall stock score reflects a stable financial position with strong cash flow generation and low leverage, but challenges in revenue growth and profitability. The technical analysis indicates a bearish trend, while the valuation is moderate. The earnings call provides a balanced view with proactive measures countering negative impacts.

Positive Factors

Cash Generation

Strong cash generation enhances financial flexibility, enabling the company to invest in growth initiatives and manage debt effectively.

Financial Flexibility

The new credit facility provides additional financial flexibility, supporting long-term growth initiatives and potential acquisitions.

Debt Reduction

Debt reduction and share repurchases improve financial health, enhancing shareholder value and reducing interest obligations.

Negative Factors

Revenue Decline

Significant revenue decline indicates challenges in market demand, affecting overall growth prospects and financial performance.

Profitability Challenges

Low profitability limits reinvestment capabilities, potentially hindering competitive positioning and long-term sustainability.

Market Decline Impact

Declines in key markets, such as automotive, reduce revenue streams and challenge the company's ability to maintain growth.

Eastern Company Business Overview & Revenue Model

Company Description

Eastern Company (EML) is a diversified manufacturer primarily involved in the production of security products and metal castings. Established in 1857, the company operates through two main segments: Security Products, which includes locks, safes, and other security-related products, and Metal Casting, which manufactures a variety of metal parts and components. Eastern Company serves a wide range of industries, including automotive, construction, and consumer goods, positioning itself as a key player in the manufacturing sector.

How the Company Makes Money

Eastern Company generates revenue through multiple key streams. The Security Products segment is a significant contributor, earning income from the sale of locks, safes, and other security devices, which are sold to both commercial and residential customers. The Metal Casting segment also adds to the revenue through the production of custom metal parts for various industrial applications. Additionally, the company benefits from strategic partnerships with other manufacturers and distributors, which help in expanding its market reach. Eastern Company's earnings are further supported by ongoing innovation and product development, allowing it to meet evolving customer needs and maintain competitive pricing.

Eastern Company Financial Statement Overview

Summary

Eastern Company faces challenges in profitability and revenue growth, with negative net income and declining revenue. The balance sheet shows improved leverage but inconsistent returns. Cash flow generation is mixed, with strong operating cash flow but declining free cash flow. The company needs to address profitability and cash management to improve its financial health.

Income Statement

The company's revenue has shown fluctuations with a recent decline in TTM. Gross profit margins have been relatively stable, but net profit margins are negative, indicating challenges in profitability. EBIT and EBITDA margins have also decreased, reflecting operational inefficiencies.

Balance Sheet

The debt-to-equity ratio has improved over time, indicating better leverage management. However, the return on equity is highly volatile, with recent negative figures, suggesting inconsistent profitability. The equity ratio remains stable, providing some balance sheet strength.

Cash Flow

Operating cash flow has seen significant growth in the TTM, but free cash flow growth is negative, indicating potential cash management issues. The free cash flow to net income ratio is positive, suggesting some ability to generate cash relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	255.50M	272.75M	258.86M	279.27M	246.52M	197.61M
Gross Profit	58.14M	67.27M	61.77M	58.62M	56.77M	48.09M
EBITDA	17.72M	25.68M	23.26M	23.91M	28.06M	22.09M
Net Income	7.28M	-8.53M	8.59M	12.30M	9.35M	5.41M
Balance Sheet
Total Assets	220.05M	235.31M	252.04M	261.52M	266.33M	275.53M
Cash, Cash Equivalents and Short-Term Investments	9.23M	16.06M	9.29M	10.19M	6.17M	15.32M
Total Debt	55.42M	56.64M	62.08M	76.40M	75.12M	101.33M
Total Liabilities	95.77M	114.62M	119.56M	134.91M	151.73M	171.22M
Stockholders Equity	124.28M	120.69M	132.48M	126.61M	114.60M	104.31M
Cash Flow
Free Cash Flow	13.09M	10.84M	20.05M	7.10M	-5.74M	17.59M
Operating Cash Flow	16.81M	20.55M	26.48M	10.46M	-2.02M	20.69M
Investing Cash Flow	1.66M	-8.47M	-5.43M	5.09M	12.62M	-9.11M
Financing Cash Flow	-16.94M	-4.82M	-22.90M	-11.78M	-20.27M	-13.18M

Eastern Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.69
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 19.69 is above the 20-day moving average (MA) of 19.55, below the 50-day MA of 20.27, and below the 200-day MA of 22.54, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 48.05 is Neutral, neither overbought nor oversold. The STOCH value of 36.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EML.

Eastern Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TKR	76 Outperform	$5.97B	20.29	9.80%	1.62%	-1.01%	-12.13%
KMT	72 Outperform	$2.20B	23.70	7.36%	2.77%	-2.63%	-4.46%
SWK	68 Neutral	$11.28B	25.19	4.92%	4.59%	-1.40%	―
EML	64 Neutral	$119.13M	22.91	4.98%	2.24%	-8.54%	-68.18%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HLMN	61 Neutral	$1.79B	47.35	3.11%	―	4.47%	345.07%
CVR	38 Underperform	$12.75M	-3.58	-16.20%	0.92%	-12.32%	0.17%

Eastern Company Corporate Events

Eastern Company Secures New $100 Million Credit Facility

On October 28, 2025, The Eastern Company entered into a new Credit Agreement with Citizens Bank, N.A., providing a $100 million five-year senior secured revolving credit facility. This agreement allows for revolving loans, swing line loans, and letters of credit, with the potential to increase the commitment by $75 million. The company used approximately $36 million from this facility to repay its prior credit agreement, which included a $60 million term portion and a $50 million revolving commitment portion, effectively restructuring its debt obligations.