Eastern Company (EML)
NASDAQ:EML
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Eastern Company
(NASDAQ:EML)
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Rating:60Neutral
Price Target:
$22.00
▲(11.73% Upside)
Action:Reiterated
Date:05/14/26
The score reflects improved financial health (stronger balance sheet and positive cash generation) but constrained by weak revenue momentum and thin margins. Technical indicators suggest limited near-term strength, while the earnings call points to a manageable near-term operational headwind (Big 3) with expected improvement later in 2026. Valuation support comes mainly from the dividend yield given the unusable P/E.
Positive Factors
Balance Sheet Strength & Liquidity
Eastern's materially reduced leverage and meaningful revolver availability create durable financial flexibility. A conservative capital structure lowers refinancing risk and preserves optionality to fund automation, share repurchases, dividends or targeted M&A without stressing operations over the next several quarters.
Negative Factors
Weak Top-line & Backlog YoY
Persistent revenue declines and an ~8% YoY backlog reduction constrain operating leverage and limit scale benefits. Soft top-line momentum reduces the company's ability to spread fixed costs, slowing durable margin expansion and making near-term growth reliant on program ramps and end-market recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength & Liquidity
Eastern's materially reduced leverage and meaningful revolver availability create durable financial flexibility. A conservative capital structure lowers refinancing risk and preserves optionality to fund automation, share repurchases, dividends or targeted M&A without stressing operations over the next several quarters.
Read all positive factors
Eastern Company (EML) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$126.89M
Dividend Yield2.24%
Average Volume (3M)11.46K
Price to Earnings (P/E)49.0
Beta (1Y)0.81
Revenue Growth-11.56%
EPS Growth-73.26%
CountryUS
Employees1,246
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)0.96
Shares Outstanding6,030,914
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 Profit3.27
Enterprise Value/Ebitda14.33
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
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Eastern Company Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: meaningful operational and balance-sheet progress (sequential sales recovery, improved operating cash flow, debt reduction, inventory declines, and strategic investments/ERP deployment) are offset by near-term headwinds—primarily an operational misstep at Big 3 and continued softness in returnable transport packaging—that materially compressed margins and reduced net income and adjusted EBITDA year-over-year. Management expects the Big 3 impact to be contained to H1 2026 and is taking corrective and investment actions, suggesting the company is positioned to benefit as demand recovery continues.Positive Updates
Sequential Sales Improvement
Net sales of $59.7M in Q1 FY2026 improved sequentially by 4% from Q4, reflecting improved order execution and an improving demand environment despite year-over-year softness in returnable dunnage.
Negative Updates
Big 3 Operational Issue Pressuring Margins
An operating issue in Big 3's returnable racks business—orders quoted below margin thresholds to fill capacity—drove below-plan performance. Management expects the financial impact to be contained to the first half of 2026 while contracts run off.
Read all updates
Q1-2026 Updates
Positive
Negative
Sequential Sales Improvement
Net sales of $59.7M in Q1 FY2026 improved sequentially by 4% from Q4, reflecting improved order execution and an improving demand environment despite year-over-year softness in returnable dunnage.
Read all positive updates
Company Guidance
Management's guidance was that the Q1 operational shortfall at Big 3 is contained to the first half of 2026 as below‑margin contracts run off, while the demand recovery should broaden into the balance of 2026 supported by new program ramps in Q2–Q3; key metrics cited include Q1 net sales of $59.7M (up 4% sequentially), backlog of $82.2M (up from $81.1M sequentially, down ~8% YoY from $85.9M), Q1 adjusted EBITDA of $3.0M (5% of sales) versus $4.6M (7.3%) a year ago, gross margin 20% ($11.9M) vs 22.4% ($14.2M) prior-year, cash from operations of $3.5M (vs a $1.9M use a year ago), capex $0.9M, inventories $53.1M (down $3.3M), accounts receivable $32.6M, working capital $71.3M with a 3.5x current ratio, total assets $217M, total debt $33M, $67M available on a $100M revolver, ongoing share repurchases (~21,000 shares in Q1) and a continued regular dividend while management pursues de‑leveraging, targeted automation investments and ERP/lean initiatives to drive profitable order conversion.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 | 242.71M | 248.97M | 272.75M | 258.86M | 279.27M | 246.52M |
| Gross Profit | 52.74M | 56.39M | 67.27M | 61.77M | 58.62M | 56.77M |
| EBITDA | 12.06M | 13.79M | 25.68M | 23.26M | 23.91M | 28.06M |
| Net Income | 3.81M | 5.12M | -8.53M | 8.59M | 12.30M | 9.35M |
Balance Sheet | ||||||
| Total Assets | 217.09M | 216.68M | 235.31M | 252.04M | 261.52M | 266.33M |
| Cash, Cash Equivalents and Short-Term Investments | 7.62M | 7.41M | 16.06M | 9.29M | 10.19M | 6.17M |
| Total Debt | 53.46M | 53.86M | 56.64M | 62.08M | 76.40M | 75.12M |
| Total Liabilities | 92.56M | 92.03M | 114.62M | 119.56M | 134.91M | 151.73M |
| Stockholders Equity | 124.53M | 124.65M | 120.69M | 132.48M | 126.61M | 114.60M |
Cash Flow | ||||||
| Free Cash Flow | 9.82M | 4.90M | 10.84M | 20.05M | 7.10M | -5.74M |
| Operating Cash Flow | 13.80M | 8.87M | 20.55M | 26.48M | 10.46M | -2.02M |
| Investing Cash Flow | 197.52K | -508.92K | -8.47M | -5.43M | 5.09M | 12.62M |
| Financing Cash Flow | -15.68M | -16.30M | -4.82M | -22.90M | -11.78M | -20.27M |
Eastern Company Technical Analysis
Positive
19.69
Price Trends
21.16
Negative
19.83
Positive
20.62
Positive
Market Momentum
-0.15
Positive
48.67
Neutral
49.99
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 below the 20-day moving average (MA) of 21.41, below the 50-day MA of 21.16, and below the 200-day MA of 20.62, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 48.67 is Neutral, neither overbought nor oversold. The STOCH value of 49.99 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $8.34B | 17.82 | 9.77% | 1.61% | 3.31% | -5.18% | |
64 Neutral | $2.75B | 11.82 | 10.46% | 2.74% | 7.16% | 28.79% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $11.89B | 43.69 | 4.12% | 4.42% | -0.06% | 3.45% | |
60 Neutral | $126.89M | 49.04 | 3.06% | 2.24% | -11.56% | -73.26% | |
57 Neutral | $1.44B | -84.87 | 2.94% | ― | 5.49% | 92.98% | |
46 Neutral | $9.42M | -6.64 | -16.20% | 0.84% | 4.23% | 59.12% |
* Industrials Sector Average
EML
Eastern Company
21.09
-1.03
-4.64%
CVR
Chicago Rivet & Machine Co
9.50
-1.76
-15.59%
KMT
Kennametal
36.94
16.01
76.51%
SWK
Stanley Black & Decker
78.93
15.82
25.06%
TKR
Timken Company
127.42
58.68
85.35%
HLMN
Hillman Solutions
7.45
0.12
1.64%
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...
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.