Eastern Company (EML)
NASDAQ:EML
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Eastern Company
(NASDAQ:EML)
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Rating:51Neutral
Price Target:
$21.00
▲(6.65% Upside)
Action:ReiteratedDate: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
Cost Savings
The $4.0M of annualized savings is a durable structural improvement to the cost base, lowering the break-even revenue level and improving earnings leverage. Persisting these savings supports margin recovery and provides flexibility to reinvest in growth or withstand lower demand periods.
Negative Factors
Weak Cash Generation
Sharp deterioration to very low operating cash flow and negative free cash flow creates durable cash-conversion risk. This undermines the company's ability to fund capex, deleverage, return capital, or absorb shocks without relying on external liquidity, increasing financing and execution risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Cost Savings
The $4.0M of annualized savings is a durable structural improvement to the cost base, lowering the break-even revenue level and improving earnings leverage. Persisting these savings supports margin recovery and provides flexibility to reinvest in growth or withstand lower demand periods.
Read all positive factors
Eastern Company (EML) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$128.03M
Dividend Yield2.24%
Average Volume (3M)11.46K
Price to Earnings (P/E)23.3
Beta (1Y)0.83
Revenue Growth-8.54%
EPS Growth-68.18%
CountryUS
Employees1,246
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)0.31
Shares Outstanding6,041,767
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 Cap1.36
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit3.17
Enterprise Value/Ebitda10.45
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 internationally. It offers turnkey returnable packaging solutions that are used in the assembly process of vehicles, aircraft,...
How the Company Makes Money
null...
Eastern Company Earnings Call Summary
Earnings Call Date:Mar 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Neutral
The call presents a balanced view: material near-term financial deterioration (notably a 9% revenue decline, 57% drop in net income, and lower adjusted EBITDA margin) contrasted with decisive operational actions that improved cost structure, neutralized ~$10M of tariff exposure, delivered $4M of annualized savings, showed sequential improvement in Q4, and strengthened liquidity with a $100M credit facility. Management emphasized cautious optimism for 2026 given a strengthening commercial pipeline and specific growth in Asia (+25%). While the company made meaningful progress to position itself for recovery, the magnitude of year-over-year declines in profit and sales tempers the outlook in the near term.Positive Updates
Sequential Revenue and EBITDA Improvement
Fourth quarter revenue increased 4% sequentially to $57.5M (Q3 $55.3M) and adjusted EBITDA improved by $1.1M sequentially; company noted a ~50% margin on the incremental Q4 revenue, indicating operating leverage as volumes stabilized.
Negative Updates
Full-Year and Quarterly Revenue Declines
Full-year net sales declined 9.0% to $249.0M (FY 2025 vs FY 2024 $272.8M). Fourth quarter net sales fell 13.7% year-over-year to $57.5M from $66.7M, driven by lower shipments of returnable transport packaging products and truck mirror assemblies.
Read all updates
Q4-2025 Updates
Positive
Negative
Sequential Revenue and EBITDA Improvement
Fourth quarter revenue increased 4% sequentially to $57.5M (Q3 $55.3M) and adjusted EBITDA improved by $1.1M sequentially; company noted a ~50% margin on the incremental Q4 revenue, indicating operating leverage as volumes stabilized.
Read all positive updates
Company Guidance
Management's guidance for 2026 was cautiously optimistic: they enter the year with a leaner cost base, a strengthening commercial pipeline, and early demand stabilization signals (order flow, OEM production and a deeper opportunity funnel), while remaining disciplined on M&A and execution. Key metrics cited: FY2025 revenue $249.0M (‑9% YoY), adjusted EBITDA $19.4M (7.8% margin vs $26.3M/9.6% prior year), Q4 revenue $57.5M (+4% sequential from $55.3M) with adjusted EBITDA up $1.1M sequentially (≈50% margin on incremental revenue), Q4 gross margin 22.8% (vs 23.0%), FY gross margin 22.9% (vs 24.7%), backlog $81.1M (down from $89.1M), Asia growth +25% YoY, ~$4M annualized cost savings, ~$10M of tariff exposure neutralized, debt reduction $8.7M, $2.7M returned to shareholders and ~153k shares repurchased (~2.5% / ~$3.7M), new $100M five‑year revolver with $66.0M availability, and senior net leverage of 1.35x.Eastern Company Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
55
Neutral
Cash Flow
32
Negative
| 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
Positive
19.69
Price Trends
19.29
Positive
19.18
Positive
20.92
Positive
Market Momentum
0.43
Negative
65.01
Neutral
85.29
Negative
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 below the 20-day moving average (MA) of 20.43, above the 50-day MA of 19.29, and below the 200-day MA of 20.92, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 65.01 is Neutral, neither overbought nor oversold. The STOCH value of 85.29 is Negative, 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $7.36B | 20.35 | 9.35% | 1.61% | -1.01% | -12.13% | |
65 Neutral | $2.89B | 16.15 | 8.61% | 2.74% | -2.63% | -4.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | $11.09B | 28.82 | 4.47% | 4.42% | -1.40% | ― | |
55 Neutral | $1.64B | 44.53 | 3.11% | ― | 4.47% | 345.07% | |
51 Neutral | $128.03M | 23.31 | 5.77% | 2.24% | -8.54% | -68.18% | |
48 Neutral | $9.72M | -12.41 | -16.20% | 0.84% | -12.32% | 0.17% |
* Industrials Sector Average
EML
Eastern Company
21.19
-1.91
-8.28%
CVR
Chicago Rivet & Machine Co
10.06
-0.23
-2.27%
KMT
Kennametal
37.93
19.44
105.08%
SWK
Stanley Black & Decker
71.49
10.21
16.66%
TKR
Timken Company
105.88
43.35
69.31%
HLMN
Hillman Solutions
8.36
0.47
5.96%
Eastern Company Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Eastern Company Announces Director Retirements and Governance Changes
Neutral
Mar 2, 2026
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 ...
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.