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Eastman Chemical (EMN)
NYSE:EMN
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Eastman Chemical (EMN) AI Stock Analysis

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EMN

Eastman Chemical

(NYSE:EMN)

Rating:69Neutral
Price Target:
$75.00
▲(8.04% Upside)
Eastman Chemical's overall stock score reflects strong valuation and operational efficiency, tempered by bearish technical indicators and challenges from trade tariffs impacting demand. The company's strategic cost reduction initiatives and attractive dividend yield are positive factors, but liquidity concerns and market uncertainties weigh on the outlook.
Positive Factors
Investment Opportunity
The stock provides a good reentry point given the price relative to expected earnings.
Stock Valuation
Valuations are now considered attractive as the stock trades below the low end of its historical trading range.
Negative Factors
Inventory Challenges
The need to reduce inventory against a challenging demand backdrop is impacting the company's performance.
Project Delays
The push out of Eastman's second molecular recycling facility by at least 2 years is affecting future recycling earnings potential.

Eastman Chemical (EMN) vs. SPDR S&P 500 ETF (SPY)

Eastman Chemical Business Overview & Revenue Model

Company DescriptionEastman Chemical Company (EMN) is a global specialty materials company that produces a broad range of advanced materials, chemicals, and fibers. Headquartered in Kingsport, Tennessee, Eastman operates through various segments, including Additives & Functional Products, Advanced Materials, Chemical Intermediates, and Fibers. The company serves diverse markets such as automotive, building and construction, consumer goods, and healthcare, with core products ranging from specialty plastics and adhesives to coatings and chemical intermediates.
How the Company Makes MoneyEastman Chemical generates revenue through the production and sale of its specialty materials and chemicals across multiple sectors. The company primarily earns money through its various business segments, with significant contributions from high-performance materials, additives, and chemical intermediates. Key revenue streams include the sale of engineered materials used in consumer electronics and automotive applications, along with specialty additives that enhance product performance in various industries. Additionally, Eastman has formed strategic partnerships and collaborations with other companies to develop innovative solutions, which further bolster its revenue. The company also benefits from global market trends towards sustainability and environmentally friendly products, aligning its offerings with growing consumer demands.

Eastman Chemical Key Performance Indicators (KPIs)

Any
Any
Adjusted EBIT by Segment
Adjusted EBIT by Segment
Shows earnings before interest and taxes for each segment, adjusted for one-time items, providing insight into core profitability and operational efficiency.
Chart InsightsEastman Chemical's Adjusted EBIT for Advanced Materials and Additives and Functional Products shows a recovery trend in 2025, despite earlier volatility. However, Chemical Intermediates face significant challenges, with EBIT turning negative, reflecting macroeconomic pressures and trade uncertainties. The earnings call highlights strategic investments in methanolysis and ethylene to propylene conversion as long-term growth drivers, but immediate challenges persist, particularly in the Fibers segment due to tariffs. Cost-saving initiatives are crucial as Eastman navigates demand volatility and focuses on cash generation.
Data provided by:Main Street Data

Eastman Chemical Earnings Call Summary

Earnings Call Date:Aug 01, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong operational improvements, particularly in the methanolysis plant and cost reduction initiatives. However, significant challenges persist due to trade war tariffs impacting demand, especially in consumer durables and automotive markets. The overall outlook remains cautious, with potential for improvement next year if demand stabilizes.
Q2-2025 Updates
Positive Updates
Methanolysis Plant Success
The methanolysis plant is running well, achieving 105% rate test capacity, with plans for debottlenecking to reach 130% capacity, improving ROIC efficiency.
Cost Reduction Initiatives
Targeting additional cost cuts of $75 million to $100 million, focusing on optimizing contract partners, maintenance execution, and energy efficiency.
E to P Investment Promises Growth
Plans to convert ethylene to propylene in existing crackers, projected to improve earnings by $50 million to $100 million in EBIT over the cycle.
Strong Engagement in Innovation
Continued strong customer engagement in innovative solutions across circular platforms, automotive, and personal care spaces.
Negative Updates
Trade War and Tariff Challenges
Significant impact on demand due to ongoing trade war and tariffs, causing a chaotic business environment and demand uncertainty.
Consumer Durables and Automotive Market Weakness
Mid-single-digit drop in demand expected in consumer durables and automotive markets, affected by prebuy dynamics and tariff uncertainties.
Fibers Business Decline
Fibers business faces a $20 million tariff impact and a $20 million asset utilization headwind, coupled with higher energy costs not covered by contracts.
CI Business Under Pressure
Chemical Intermediates (CI) business faces challenges from overcapacity, with signs of products being exported below cash cost.
Company Guidance
During the Eastman Second Quarter 2025 Conference Call, the company provided guidance that highlighted several key metrics and strategic actions. The company anticipates reducing capital spending in 2026, following significant cost savings anticipated for 2025. CEO Mark Costa discussed the challenges posed by trade dynamics and tariffs, which have led to a predicted mid-single-digit drop in demand for the latter half of 2025. The company is focused on cash generation, with inventory reduction efforts expected to present a $75 million to $100 million utilization headwind in the back half of the year. Additionally, Eastman is targeting cost reductions of $75 million to $100 million and expects these efforts to improve earnings next year. Despite current challenges, the company remains optimistic about growth opportunities, particularly in the methanolysis investments, which could enhance profitability by $50 million to $100 million in EBIT over the cycle.

Eastman Chemical Financial Statement Overview

Summary
Eastman Chemical demonstrates strong operational efficiency with healthy EBIT and EBITDA margins, though recent revenue declines and reduced net profit margins highlight profitability pressures. The balance sheet remains stable with a balanced debt-to-equity ratio and solid return on equity. However, declining free cash flow growth and cash conversion ratios suggest potential liquidity concerns.
Income Statement
75
Positive
Eastman Chemical's income statement reflects a stable gross profit margin of around 24% over the recent periods, indicating consistent cost management. However, the net profit margin has slightly decreased to 8.96% in the TTM, reflecting some pressure on profitability. Revenue growth has been negative in the TTM, showing a decline of 0.78%, which is a concern. The EBIT and EBITDA margins remain healthy at 13.11% and 18.57%, respectively, suggesting strong operational efficiency despite revenue challenges.
Balance Sheet
70
Positive
The balance sheet shows a moderate debt-to-equity ratio of 0.88 in the TTM, indicating a balanced approach to leveraging. Return on equity is solid at 14.38%, reflecting effective use of equity to generate profits. The equity ratio stands at 38.35%, suggesting a stable capital structure. However, the slight increase in debt levels over time could pose a risk if not managed carefully.
Cash Flow
65
Positive
Cash flow analysis reveals a decline in free cash flow growth by 28.87% in the TTM, which is concerning. The operating cash flow to net income ratio is 0.32, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is 0.42, showing a decline in cash conversion efficiency. These trends suggest potential liquidity challenges if the decline continues.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue9.28B9.37B9.20B10.54B10.48B8.46B
Gross Profit2.26B2.33B2.06B2.06B2.52B2.00B
EBITDA1.72B1.80B1.81B1.64B1.81B1.31B
Net Income832.00M905.00M894.00M793.00M857.00M478.00M
Balance Sheet
Total Assets15.22B15.21B14.63B14.67B15.52B16.08B
Cash, Cash Equivalents and Short-Term Investments423.00M837.00M548.00M493.00M459.00M564.00M
Total Debt5.13B5.02B4.97B5.15B5.37B5.62B
Total Liabilities9.31B9.36B9.10B9.43B9.73B9.97B
Stockholders Equity5.83B5.78B5.46B5.15B5.70B6.02B
Cash Flow
Free Cash Flow409.00M688.00M546.00M364.00M1.04B1.06B
Operating Cash Flow1.00B1.29B1.37B975.00M1.62B1.46B
Investing Cash Flow-512.00M-534.00M-432.00M392.00M-29.00M-394.00M
Financing Cash Flow-589.00M-454.00M-888.00M-1.32B-1.69B-704.00M

Eastman Chemical Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price69.42
Price Trends
50DMA
72.17
Negative
100DMA
75.11
Negative
200DMA
84.12
Negative
Market Momentum
MACD
-0.54
Negative
RSI
52.00
Neutral
STOCH
78.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMN, the sentiment is Neutral. The current price of 69.42 is above the 20-day moving average (MA) of 65.81, below the 50-day MA of 72.17, and below the 200-day MA of 84.12, indicating a neutral trend. The MACD of -0.54 indicates Negative momentum. The RSI at 52.00 is Neutral, neither overbought nor oversold. The STOCH value of 78.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EMN.

Eastman Chemical Risk Analysis

Eastman Chemical disclosed 15 risk factors in its most recent earnings report. Eastman Chemical 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

Eastman Chemical Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$6.21B25.689.62%1.26%5.41%23.44%
76
Outperform
$7.77B16.3933.61%1.27%2.27%17.81%
69
Neutral
$8.08B9.8814.52%4.75%1.60%-3.97%
64
Neutral
$9.18B13.2011.73%-2.34%89.86%
61
Neutral
$10.24B6.180.71%2.90%3.45%-36.02%
61
Neutral
$9.99B-8.66%2.04%-33.05%-97.63%
54
Neutral
$11.26B25.36-0.64%2.40%-3.00%-124.79%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EMN
Eastman Chemical
69.42
-27.31
-28.23%
ALB
Albemarle
79.54
-2.86
-3.47%
NEU
Newmarket
828.21
282.51
51.77%
WLK
Westlake Corporation
86.53
-49.91
-36.58%
ESI
Element Solutions
25.44
0.08
0.32%
AVTR
Avantor
13.29
-11.83
-47.09%

Eastman Chemical Corporate Events

Executive/Board Changes
Eastman Chemical Appoints Damon Audia to Board
Positive
Jun 27, 2025

On June 27, 2025, Eastman Chemical Company announced the appointment of Damon Audia as a director on its Board, to serve until the 2026 Annual Meeting of Stockholders. Mr. Audia will join the Audit, Finance, and Environmental, Safety and Sustainability Committees, receiving compensation aligned with the company’s non-employee directors. This strategic appointment is expected to enhance the company’s governance and oversight capabilities, potentially impacting its operational and sustainability initiatives positively.

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.Date of analysis: Aug 29, 2025