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Eastman Chemical (EMN)
NYSE:EMN
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Eastman Chemical
(NYSE:EMN)
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Rating:72Outperform
Price Target:
$77.00
▲(11.08% Upside)
Eastman Chemical's overall stock score reflects a balanced view of its financial stability, attractive valuation, and positive technical indicators. The company's strategic focus on cost savings and innovation is promising, but trade challenges and weak demand pose near-term risks. The strong dividend yield and low P/E ratio enhance its appeal.
Positive Factors
Diversified Specialty Portfolio
Eastman's diversified portfolio across advanced materials, chemicals, additives and fibers provides durable revenue diversification across automotive, consumer goods and construction end markets. This reduces single-market cyclicality and supports cross-selling, R&D leverage, and resilience versus narrow-play peers.
Meaningful Cost Reduction Program
Delivered $75M of savings and targeting $100M more demonstrates structural operational discipline. Sustainable cost-out programs can permanently lift margins, fund innovation and improve cash flow conversion, giving the company flexibility through cyclical weakness and supporting long-term competitiveness.
Circular Innovation and Scale-Up
Achieving 90% yields and planning a 30% expansion of the circular polyester methanolysis process creates a durable cost and sustainability advantage. Scalable circular capacity and rPET demand links provide long-term differentiation, potential feedstock cost advantages and new revenue streams.
Negative Factors
Declining Revenue Trend
Negative trailing revenue growth signals structural demand weakness or competitive pressure across core segments. Persistent top-line contraction erodes operating leverage, limits ability to fund R&D or capital projects internally, and complicates margin recovery without sustained volume or mix improvement.
Weak Free Cash Flow Conversion
Declining FCF growth and low operating cash coverage indicate constrained cash generation versus reported earnings. Weaker cash conversion reduces reinvestment capacity, slows deleveraging and limits discretionary returns to shareholders, increasing reliance on cost-outs or external financing over time.
Chemical Intermediates Pricing Pressure
Persistent excess capacity in China and a manufacturing downturn exert structural downwards pressure on prices and margins in Chemical Intermediates. Prolonged global oversupply can compress segment profitability and delay recovery, requiring sustained cost or differentiation efforts to restore returns.
Eastman Chemical (EMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.91B
Dividend Yield5.33%
Average Volume (3M)1.37M
Price to Earnings (P/E)16.9
Beta (1Y)1.09
Revenue Growth-3.33%
EPS Growth-19.59%
CountryUS
Employees14,000
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.75
Shares Outstanding114,069,800
10 Day Avg. Volume1,779,735
30 Day Avg. Volume1,371,286
Financial Highlights & Ratios
PEG Ratio4.23
Price to Book (P/B)1.84
Price to Sales (P/S)1.14
P/FCF Ratio15.49
Enterprise Value/Market Cap1.58
Enterprise Value/Revenue1.38
Enterprise Value/Gross Profit6.06
Enterprise Value/Ebitda7.88
Forecast
1Y Price Target
$73.13Price Target Upside5.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Eastman Chemical Business Overview & Revenue Model
Company DescriptionEastman Chemical Company operates as a specialty materials company in the United States and internationally. The company's Additives & Functional Products segment offers hydrocarbon and rosin resins; organic acid-based solutions; amine derivative-based building blocks; metam-based soil fumigants, thiram and ziram based fungicides, and plant growth regulators; specialty coalescent, specialty and commodity solvents, paint additives, and specialty polymers; heat transfer and aviation fluids; insoluble sulfur and anti-degradant rubber additives; and performance resins. It serves transportation, personal care, wellness, food, feed, agriculture, building and construction, water treatment, energy, consumables, durables, and electronics markets. Its Advanced Materials segment provides copolyesters, cellulosic biopolymers, cellulose esters, polyvinyl butyral (PVB) sheets, and window and protective films, and aftermarket applied film products for value-added end uses in the transportation, durables, electronics, building and construction, medical and pharma, and consumables markets. The company's Chemical Intermediates segment offers methylamines and salts higher amines and solvents; Olefin and acetyl derivatives, ethylene, and commodity solvents; and primary non-phthalate and phthalate plasticizers, and niche non- phthalate plasticizers to the industrial chemicals and processing, building and construction, health and wellness, and agrochemicals. Its Fibers segment provides cellulose acetate tow, triacetin, cellulose acetate flake, acetic acid, and acetic anhydride for use in filtration media primarily cigarette filters; natural and solution dyed acetate yarns for use in consumables, and health and wellness markets; and wet-laid nonwoven media, specialty and engineered papers, and cellulose acetate fibers for transportation, industrial, agriculture and mining, and aerospace markets. Eastman Chemical Company was founded in 1920 and is headquartered in Kingsport, Tennessee.
How the Company Makes MoneyEastman Chemical generates revenue primarily through the sale of its diverse portfolio of specialty chemicals and materials. The company's revenue model is based on selling products across multiple sectors, with significant contributions from advanced materials, chemical intermediates, and additives. Key revenue streams include the production of performance materials for automotive and consumer applications, as well as specialty additives used in coatings and adhesives. Eastman also engages in strategic partnerships and collaborations with various industries to innovate and expand its product offerings. Factors contributing to its earnings include a strong focus on research and development, global market reach, and adapting to evolving customer needs, particularly in sustainability and performance enhancements.
Eastman Chemical Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue across different business units, highlighting which segments are driving growth and which may need strategic adjustments.
Breaks down revenue across different business units, highlighting which segments are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The FlyEastman Chemical Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call balanced clear near-term challenges (weakness in Fibers and Chemical Intermediates, tariff/destocking effects, price pressure, and a $50–$75 million variable compensation headwind) with multiple concrete mitigation and growth actions that are already yielding results: $100 million of cost savings delivered in 2025 and another $125–$150 million targeted; an ETP project that could add $50–$100 million of earnings; rPET/methanolysis ramp expected to add revenue (4%–5%) and ~$30 million incremental improvement; debottlenecking and targeted product ramps to improve utilization. Management is cautious on macro uncertainty but emphasizes controllable levers to restore earnings and cash flow.Q4-2025 Updates
Positive Updates
Substantial Cost Reduction Program Delivered and Expanded
Delivered $100 million of cost reductions in 2025 (reported as $25 million above target) and targeting an additional $125–$150 million in 2026, implying $225–$250 million of savings over two years to boost margins and cash flow.
Circular/Methanolysis (rPET) Momentum and Revenue Growth
Kingsport methanolysis / rPET ramp driving revenue growth (company cites a 4%–5% revenue increase contribution and an incremental ~$30 million improvement versus 2025), with multiple large-brand contracts (including Pepsi) and customers pulling rPET demand forward due to mechanical-recycling quality degradation.
ETP Project to Reduce CI Volatility with Strong Economics
ETP project (convert bulk ethylene to propylene) is expected to structurally improve Chemical Intermediates earnings by ~$50–$100 million with a payback of under two years, removing bulk ethylene exposure and improving propylene margins.
Debottlenecking and Capacity Efficiency
Kingsport debottlenecking can increase throughput by ~130%, allowing more use of first-plant capacity before committing to second-plant CapEx and improving ROIC.
Targeted Volume/Portfolio Growth Initiatives
Multiple growth levers: ramping Naia staple fibers for textile markets, expanding Aventa cellulosics (food trays, cutlery, straws), architectural interlayers regained, and targeting lower-margin but high-utilization polyester markets (heavy gauge sheet, shrink packaging) to lift utilization and overall margins.
High-Purity Solvents and Specialty Products with Above-Average Growth
High-purity solvents serving semiconductors and other specialty products are growing at high rates (cited 20%–30% growth) and have margins above the segment average, contributing incremental earnings.
Improving Utilization Tailwind Expected for 2026
Company expects a utilization benefit of $25–$50 million in 2026 from fewer shutdowns, lower planned maintenance, and volume recovery, with a focus on converting utilization and cost savings into earnings.
Negative Updates
Fibers Earnings and Volume Pressures
Fibers business experienced significant weakness (analyst cited ~19% volume decline in tow), with tow and textile mix pressures; company noted tariffs drove a ~$30 million decline in textile EBIT, destocking and lower utilization drove ~$20 million headwind, and energy costs added ~$15 million of pressure.
Chemical Intermediates Market Weakness
Bulk ethylene market and export demand are challenged (Chinese pricing/exports depressing margins), creating earnings volatility in CI; company is not banking on broad market recovery in 2026 and sees CI recovery as uncertain absent structural actions (e.g., ETP).
Modest Price Pressure Across Businesses
Management expects modest price declines in some areas (fibers and parts of Advanced Materials) as raw-material benefits are shared with customers; some contracts only have partial CPT pass-through so price/cost mismatches remain a headwind.
Variable Compensation and P&L Headwind
Variable compensation is expected to be a headwind in 2026 as prior-year target shortfalls reduce payouts; management estimates a $50–$75 million negative impact year-over-year depending on performance scenarios.
Second Methanolysis Project On Hold / DOE Grant Loss
Work on a second methanolysis plant was paused after losing the DOE grant; engineering spend has been halted and the company is re-evaluating a more capital-efficient second-plant approach, delaying some growth potential.
Near-Term Demand Uncertainty and Q1 Headwinds
Q1 guidance expected to be soft (quarterly flexibility in fiber contracts, expected modest Q1 volume shortfall), and management flagged macro uncertainty, consumer weakness and potential winter-storm impacts on energy costs; Q1 results exclude potential storm impacts.
Regulatory and Product Discontinuations
Discontinued certain European crop-protection products due to regulatory bans, which were profitable and will negatively impact results in the near term.
Company Guidance
Management guided to a stabilization-and-recovery path anchored in cost reductions, utilization gains and circular growth: they delivered $100M of cost saves in 2025 (≈$25M above plan) and target another $125–150M in 2026 (bringing total to ~$225–250M over two years); they noted last year’s EBIT hit included ~40% non‑tow impacts (about $30M tariff-driven, ~$20M utilization shortfall and ~$15M higher energy), expect a Q1 that starts soft (guidance excludes potential winter‑storm effects), and forecast a 2026 utilization tailwind of $25–50M (after a ~$100M 2025 utilization headwind) plus ≈$20M lower maintenance offset by a $50–75M variable‑comp headwind. Key growth drivers include circular/methanolysis (management cited ~+$30M incremental vs. 2025 and ~4–5% revenue growth from rPET/Kingsport ramps), the ETP ethylene→propylene project (potential ~$50–100M earnings uplift with <2‑year payback), and niche add‑ons (high‑purity solvents growing ~20–30% on a small base); management said an upper‑end EPS improvement near ~$5.50–$6/share is “in range” but emphasized wide macro uncertainty.Eastman Chemical Financial Statement Overview
Summary
Profitability is steady (gross margin 22.83%, net margin 7.75%) and leverage looks manageable (debt-to-equity 0.88, ROE 12.08%), but revenue is declining (-2.82% TTM) and free cash flow generation is under pressure (FCF growth -2.45%, FCF/net income 0.41).Income Statement
Eastman Chemical's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth at -2.82%, which is concerning. However, the company maintains a stable gross profit margin of 22.83% and a net profit margin of 7.75%, reflecting decent profitability. The EBIT and EBITDA margins are also healthy, suggesting efficient operations despite the revenue decline.65
Positive
Balance Sheet
The balance sheet of Eastman Chemical is relatively strong, with a debt-to-equity ratio of 0.88 in the TTM, indicating a balanced approach to leverage. The return on equity stands at 12.08%, showcasing the company's ability to generate returns for shareholders. However, the total debt remains substantial, which could pose a risk if not managed carefully.70
Positive
Cash Flow
Cash flow analysis reveals some challenges, with a decline in free cash flow growth at -2.45% in the TTM. The operating cash flow coverage ratio is 0.42, indicating moderate coverage of net income by operating cash flow. The free cash flow to net income ratio of 0.41 suggests that the company is generating less free cash flow relative to its net income, which could impact future investments or debt repayments.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.02B | 9.38B | 9.20B | 10.54B | 10.48B | 8.46B |
| Gross Profit | 2.06B | 2.29B | 2.06B | 2.06B | 2.52B | 2.00B |
| EBITDA | 1.58B | 1.80B | 1.81B | 1.64B | 1.81B | 1.31B |
| Net Income | 699.00M | 905.00M | 894.00M | 793.00M | 857.00M | 478.00M |
Balance Sheet | ||||||
| Total Assets | 14.98B | 15.21B | 14.63B | 14.67B | 15.52B | 16.08B |
| Cash, Cash Equivalents and Short-Term Investments | 489.00M | 837.00M | 548.00M | 493.00M | 459.00M | 564.00M |
| Total Debt | 5.08B | 5.02B | 4.85B | 5.15B | 5.16B | 5.62B |
| Total Liabilities | 9.14B | 9.36B | 9.10B | 9.43B | 9.73B | 9.97B |
| Stockholders Equity | 5.77B | 5.78B | 5.46B | 5.15B | 5.70B | 6.02B |
Cash Flow | ||||||
| Free Cash Flow | 399.00M | 688.00M | 546.00M | 364.00M | 1.04B | 1.06B |
| Operating Cash Flow | 1.01B | 1.29B | 1.37B | 975.00M | 1.62B | 1.46B |
| Investing Cash Flow | -547.00M | -534.00M | -432.00M | 392.00M | -29.00M | -394.00M |
| Financing Cash Flow | -596.00M | -454.00M | -888.00M | -1.32B | -1.69B | -704.00M |
Eastman Chemical Technical Analysis
Positive
69.32
Price Trends
64.20
Positive
62.88
Positive
67.87
Positive
Market Momentum
1.35
Positive
60.81
Neutral
65.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMN, the sentiment is Positive. The current price of 69.32 is above the 20-day moving average (MA) of 68.16, above the 50-day MA of 64.20, and above the 200-day MA of 67.87, indicating a bullish trend. The MACD of 1.35 indicates Positive momentum. The RSI at 60.81 is Neutral, neither overbought nor oversold. The STOCH value of 65.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $7.91B | 16.91 | ― | 5.33% | -3.33% | -19.59% | |
68 Neutral | $6.30B | 14.17 | 29.23% | 1.59% | -1.11% | 5.15% | |
65 Neutral | $7.04B | 29.49 | 9.40% | 1.25% | 3.87% | -10.30% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | $20.08B | -106.86 | -0.21% | 1.10% | -23.92% | 90.47% | |
56 Neutral | $10.17B | -10.69 | -9.48% | 2.88% | -5.32% | -1108.29% | |
48 Neutral | $7.45B | -89.66 | -1.48% | ― | -3.59% | -126.16% |
* Basic Materials Sector Average
EMN
Eastman Chemical
69.32
-27.02
-28.04%
ALB
Albemarle
170.63
91.82
116.51%
NEU
Newmarket
670.79
194.17
40.74%
WLK
Westlake Corporation
79.32
-28.35
-26.33%
ESI
Element Solutions
29.10
4.40
17.81%
AVTR
Avantor
10.92
-10.95
-50.07%
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.