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Eastern Company (EML)
NASDAQ:EML
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Eastern Company
(NASDAQ:EML)
Rating:60Neutral
Price Target:
$26.00
▲(8.02% Upside)
Eastern Company (EML) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$146.11M
Dividend Yield1.84%
Average Volume (3M)9.85K
Price to Earnings (P/E)11.9
Beta (1Y)1.08
Revenue Growth-0.83%
EPS Growth4.51%
CountryUS
Employees1,246
SectorIndustrials
Sector Strength73
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)0.57
Shares Outstanding6,098,163
10 Day Avg. Volume9,277
30 Day Avg. Volume9,854
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.31
Enterprise Value/Revenue0.70
Enterprise Value/Gross Profit2.98
Enterprise Value/Ebitda9.10
Forecast
1Y Price Target
$26.00Price Target Upside8.02% Upside
Rating ConsensusHold
Number of Analyst Covering0
Eastern Company Business Overview & Revenue Model
Company DescriptionThe 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 MoneyEastern Company generates revenue through multiple key streams, primarily by selling its security products and industrial hardware to various customers across different sectors. The company benefits from long-term contracts and relationships with government agencies and commercial customers, providing a steady demand for its products. Additionally, Eastern Company engages in custom manufacturing, allowing it to cater to specific customer needs and expand its product offerings. Significant partnerships and collaborations with distributors and other manufacturers also contribute to its earnings, as these relationships facilitate market access and enhance distribution capabilities.
Eastern Company Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a challenging business environment with significant declines in revenue, sales, backlog, and net income. However, the company has made notable strides in cost reduction, efficiency improvements, and strategic initiatives such as the USPS vehicle program. Despite the challenges, the company remains optimistic about recovery and future opportunities.Q2-2025 Updates
Positive Updates
Cost Reduction and Efficiency Improvements
The company has improved and reduced costs across its three companies and corporate overhead, resulting in annual savings of $4 million through headcount reductions and facility optimization.
Participation in USPS Vehicle Program
Eberhard is ramping up its participation in the new United States Postal Service delivery vehicle program, supplying custom-designed products and systems.
Share Buyback Program
The company completed a share buyback program repurchasing 400,000 shares, with 82,000 shares purchased in the quarter.
Effective Management of Tariffs
The Velvac and Eberhard teams successfully neutralized the impact of tariffs on their P&L.
Net Debt Reduction
The company achieved a net debt reduction of $4 million in Q2 2025 and $5.9 million in the first half of 2025.
Negative Updates
Revenue and Sales Decline
Revenue for the quarter was $70.2 million, down 3% from the prior year, primarily due to decreased sales of truck mirror assemblies.
Decreased Backlog
The backlog decreased by $20 million or 19% to $87.1 million, driven by decreased orders for returnable transport packaging products and latch and handle assemblies.
Gross Margin Decrease
Gross margin decreased to 23.3% from 25.4% in the prior year period, primarily due to increased costs from transitioning a mirror project to in-house sourcing.
Net Income Decline
Net income from continuing operations was $2 million or $0.33 per diluted share, compared to $4.1 million or $0.65 per diluted share in the 2024 period.
Challenges in Key Markets
The heavy truck and automotive markets, which are key for the company, are currently challenging, impacting the top line.
Company Guidance
During the second quarter of fiscal year 2025, The Eastern Company reported revenue of $70.2 million, reflecting a 3% decrease from the previous year. The company achieved adjusted earnings per share of $0.56, closely aligning with their Q2 2024 results. Notably, the quarter saw a net income from continuing operations of $2 million, or $0.33 per diluted share, which included restructuring charges of $1.8 million. The company's backlog decreased by 19% to $87.1 million, primarily due to reduced orders for returnable transport packaging products and latch and handle assemblies. Gross margin declined to 23.3% from 25.4% the previous year, influenced by increased costs associated with a mirror project transition. In terms of capital allocation, Eastern repurchased 82,000 shares valued at $2.1 million, reduced net debt by $4 million, and maintained a senior net leverage ratio of 1.32x. Despite challenges in the heavy truck and automotive markets, Eastern focused on margin protection and highlighted opportunities for mergers and acquisitions as part of its strategic outlook.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.45
Neutral
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.55
Neutral
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.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 271.44M | 272.75M | 258.86M | 279.27M | 246.52M | 197.61M |
| Gross Profit | 64.10M | 67.27M | 61.77M | 58.62M | 56.77M | 48.09M |
| EBITDA | 21.02M | 25.68M | 23.26M | 23.91M | 28.06M | 22.09M |
| Net Income | -8.60M | -8.53M | 8.59M | 12.30M | 9.35M | 5.41M |
Balance Sheet | ||||||
| Total Assets | 229.41M | 235.31M | 252.04M | 261.52M | 266.33M | 275.53M |
| Cash, Cash Equivalents and Short-Term Investments | 9.11M | 16.06M | 9.29M | 10.19M | 6.17M | 16.13M |
| Total Debt | 57.35M | 56.63M | 62.08M | 76.40M | 82.62M | 101.50M |
| Total Liabilities | 104.96M | 114.62M | 119.56M | 134.91M | 151.73M | 171.22M |
| Stockholders Equity | 124.45M | 120.69M | 132.48M | 126.61M | 114.60M | 104.31M |
Cash Flow | ||||||
| Free Cash Flow | 713.69B | 10.84M | 20.05M | 7.10M | -5.74M | 17.59M |
| Operating Cash Flow | 8.35T | 20.55M | 26.48M | 10.46M | -2.02M | 20.69M |
| Investing Cash Flow | -3.32M | -8.47M | -5.43M | 5.09M | 12.62M | -9.11M |
| Financing Cash Flow | -11.19M | -4.82M | -22.90M | -11.78M | -20.27M | -13.18M |
Eastern Company Technical Analysis
Positive
24.07
Price Trends
23.22
Positive
22.67
Positive
24.76
Negative
Market Momentum
0.27
Negative
54.79
Neutral
69.69
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 24.07 is above the 20-day moving average (MA) of 23.37, above the 50-day MA of 23.22, and below the 200-day MA of 24.76, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 54.79 is Neutral, neither overbought nor oversold. The STOCH value of 69.69 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $5.42B | 17.69 | 10.52% | 1.79% | -2.01% | -9.95% | |
71 Outperform | $2.00B | 92.52 | 1.82% | ― | 1.93% | 260.13% | |
69 Neutral | $12.14B | 24.87 | 5.38% | 4.20% | -2.71% | ― | |
64 Neutral | $10.75B | 15.57 | 7.24% | 2.01% | 2.80% | -14.32% | |
63 Neutral | $1.67B | 18.36 | 7.35% | 3.73% | -3.91% | -12.49% | |
60 Neutral | $146.11M | 11.91 | 7.78% | 1.84% | -0.83% | 4.51% | |
38 Underperform | $8.89M | ― | -22.36% | 1.27% | -16.39% | -65.00% |
* Industrials Sector Average
Performance Comparison
EML
Eastern Company
24.07
-4.99
-17.17%
CVR
Chicago Rivet & Machine Co
9.43
-6.32
-40.13%
KMT
Kennametal
21.42
-2.09
-8.89%
SWK
Stanley Black & Decker
78.42
-14.14
-15.28%
TKR
Timken Company
77.15
-0.34
-0.44%
HLMN
Hillman Solutions
9.99
0.45
4.72%
Eastern Company Corporate Events
Business Operations and Strategy
Eastern Company Announces Workforce Reduction to Cut Costs
Negative
May 28, 2025
On May 28, 2025, Eastern Company initiated a workforce reduction to cut operating costs and better align its workforce with business needs. This move is expected to decrease annual operating costs by approximately $4.0 million, with associated charges of around $1.0 million primarily recorded in the second quarter of 2025. The company acknowledges potential risks and uncertainties, including higher-than-anticipated costs and adverse impacts on development activities.
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.