Eastman Chemical Company (EMN) | Investment Case

1. Company Snapshot

1.a. Company Description

Eastman 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.

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1.b. Last Insights on EMN

Eastman Chemical's recent performance was positively driven by several factors. The company's strong cash generation enabled a dividend increase, showcasing its financial stability. Additionally, cost-cutting measures and the ramp-up of its Kingsport operations signaled a potential bottoming out of its business. Its Q4 earnings call highlighted management's focus on stabilizing performance in challenged businesses. With a secure 4.8% dividend yield and a valuation of 12x earnings, analysts view the stock as a "Buy". (Source: Marketbeat Ratings)

1.c. Company Highlights

Last Price	79.16
Change Percentage	1.46%
Open	77.77
Previous Close	78.02
Market Cap ( Millions)	9030
Volume	1375140
Year High	100.3
Year Low	56.11
M A 50	69.59
M A 200	69.34

FCF Yield	4.70%
Dividend Yield	4.21%
ROE	8.09%
Debt / Equity	85.17%
Net Debt / EBIDTA	347.53%
Price To Book	1.51
Price Earnings Ratio	19.04
Price To FCF	21.3
Price To sales	1.03
EV / EBITDA	10.43

2. Eastman's Q4 2025 Earnings: A Closer Look at Financial Performance

Eastman reported revenues that were in line with analyst expectations, though the exact figure wasn't directly stated. The company's EPS came in at $0.75, slightly below the estimated $0.76. The earnings report highlighted a mixed performance across different segments, with some areas showing resilience and others facing challenges. The adjusted EPS for the full year was not explicitly mentioned, but the company has provided guidance for 2026, indicating a potential improvement in earnings. The gross margin was impacted by various factors, including headwinds in the Fibers segment and favorable conditions in certain product lines within Advanced Materials.

Publication Date: Feb -09

                                    📋 Highlights
                                    Cost Reduction Progress::
                                                Achieved $100M in savings in 2025, exceeding target by $25M, with $125M–$150M planned for 2026, targeting $225M–$250M total over two years.
Advanced Materials Earnings Potential::
                                                Anticipates $5.50–$6 EPS range, with $30M+ revenue growth from circular economy initiatives and 4-5% volume expansion in high-margin applications.
Fibers Challenges::
                                                Faces $30M tariff headwind, 19% volume decline in Q1 due to textile destocking, but expects stabilization with Naia filament and Aventa product growth.
Chemical Intermediates Strategy::
                                                ETP project to convert ethylene to propylene, shifting focus to North American demand for higher-margin specialty sales, offsetting low-value exports.
Inventory & Utilization Tailwinds::
                                                2026 utilization benefits of $25M–$50M from reduced shutdowns and stable inventory, reversing 2025 $100M utilization headwind.

                                

Segment Performance and Outlook

The Fibers segment faced significant challenges, with volumes down 19% due to destocking in the textile industry. However, Eastman anticipates stable volumes on an annual basis, with some growth in tow, driven by contracts that have flexibility quarter-by-quarter. The Advanced Materials segment is expected to benefit from volume growth, cost reduction initiatives, and a utilization tailwind, potentially leading to a meaningful improvement in earnings. The company is also focusing on innovation, particularly in the circular economy platform, which is expected to drive growth.

Cost Reduction and Innovation

Eastman achieved $100 million in cost reductions in 2025, exceeding its target, and is planning for an additional $125 million to $150 million in cost savings in 2026. This focus on cost management is part of the company's strategy to drive earnings growth. Innovation, especially in areas like the circular economy and high-purity solvents in the Additives and Functional Products segment, is also seen as a key driver of future growth. The company is cautiously optimistic about market demand and is working to deliver on its volume targets.

Valuation and Future Prospects

Analyzing Eastman's valuation metrics provides insight into what is priced into the stock. The company has a P/E Ratio of 18.62, a P/B Ratio of 1.53, and an EV/EBITDA of 10.34. The Dividend Yield is 4.3%, and the Free Cash Flow Yield is 4.8%. These metrics suggest that the market is pricing in a moderate growth outlook. With analysts estimating revenue growth of 3.5% for the next year, the current valuation appears reasonable. Eastman's efforts to restore earnings power, driven by cost reductions, innovation, and a recovery in market demand, are key factors to watch.

3. NewsRoom

Euro Manganese Announces Appointment of Director and Board Update

Feb -17

Source: newsfilecorp.com

Cherokee Insurance Co Has $4.56 Million Stock Position in Eastman Chemical Company $EMN

Feb -15

Source: defenseworld.net

Eastman Board Declares Dividend

Feb -12

Source: businesswire.com

SPSM Stumbles And Falls Short of Small Cap Promise

Feb -12

Source:

AGF Management Ltd. Sells 25,107 Shares of Eastman Chemical Company $EMN

Feb -06

Source: defenseworld.net

Strs Ohio Has $173,000 Holdings in Eastman Chemical Company $EMN

Feb -04

Source: defenseworld.net

Thrivent Financial for Lutherans Buys 24,458 Shares of Eastman Chemical Company $EMN

Feb -03

Source: defenseworld.net

Eastman Chemical Company $EMN Holdings Lifted by Federated Hermes Inc.

Feb -03

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.45%)

6. Segments

Advanced Materials

Expected Growth: 5.5%

Eastman Chemical Company's Advanced Materials segment growth of 5.5% is driven by increasing demand for specialty plastics and composites in the automotive and aerospace industries, as well as growing adoption of sustainable packaging solutions. Additionally, the company's strategic investments in innovation and capacity expansion have enabled it to capitalize on emerging trends in electric vehicles and renewable energy.

Additives & Functional Products

Expected Growth: 5.8%

Eastman Chemical Company's Additives & Functional Products segment growth of 5.8% is driven by increasing demand for sustainable packaging solutions, growth in the automotive and construction industries, and rising adoption of specialty additives in the personal care and agriculture markets, as well as the company's strategic investments in innovation and capacity expansion.

Chemical Intermediates

Expected Growth: 5.2%

Eastman Chemical Company's Chemical Intermediates segment growth of 5.2% is driven by increasing demand for specialty chemicals, expansion in emerging markets, and strategic investments in capacity additions. Additionally, the company's focus on innovation and sustainability, as well as its diversified product portfolio, contribute to the segment's growth momentum.

Fibers

Expected Growth: 5.0%

Eastman Chemical Company's Fibers segment growth is driven by increasing demand for sustainable textiles, rising adoption of recycled fibers, and growing popularity of athleisure wear. Additionally, the company's strategic investments in capacity expansions and product innovations, such as its Naia cellulosic fibers, are expected to contribute to the 5.0% growth rate.

Other

Expected Growth: 4.8%

Eastman Chemical's 4.8% growth in 'Other' segment is driven by increasing demand for acetyls, a key component in food, pharmaceutical, and construction industries. Additionally, the company's strategic investments in specialty chemicals and additives, as well as its focus on emerging markets, contribute to this growth.

7. Detailed Products

Additives

Eastman Chemical Company's additives are used to enhance the performance and functionality of various products such as plastics, coatings, and adhesives.

Adhesives and Intermediates

Eastman's adhesives and intermediates are used in a wide range of applications including packaging, laminating, and pressure-sensitive adhesives.

Advanced Materials

Eastman's advanced materials are used in high-performance applications such as aerospace, automotive, and industrial markets.

Fibers

Eastman's fibers are used in a variety of applications including textiles, nonwovens, and specialty fibers.

Specialty Fluids

Eastman's specialty fluids are used in a range of applications including oil and gas, industrial, and consumer markets.

Specialty Polymers

Eastman's specialty polymers are used in a variety of applications including coatings, adhesives, and plastics.

8. Eastman Chemical Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Eastman Chemical Company faces moderate threat from substitutes due to the availability of alternative products from competitors, but the company's strong brand reputation and product differentiation mitigate this threat.

Bargaining Power Of Customers

Eastman Chemical Company's customers have limited bargaining power due to the company's diversified customer base and lack of concentration in a single customer segment.

Bargaining Power Of Suppliers

Eastman Chemical Company's suppliers have moderate bargaining power due to the company's dependence on certain raw materials, but the company's long-term contracts and diversified supplier base mitigate this threat.

Threat Of New Entrants

Eastman Chemical Company faces low threat from new entrants due to the high barriers to entry in the chemical industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

Eastman Chemical Company operates in a highly competitive industry with several established players, leading to intense rivalry and pricing pressure.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	47.03%
Debt Cost	5.86%
Equity Weight	52.97%
Equity Cost	11.41%
WACC	8.80%
Leverage	88.79%

11. Quality Control: Eastman Chemical Company passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

NewMarket

A-Score: 6.9/10

Value: 4.5

Growth: 7.2

Quality: 7.2

Yield: 4.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

Cabot

A-Score: 5.4/10

Value: 6.9

Growth: 6.4

Quality: 5.7

Yield: 5.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

RPM International

A-Score: 5.3/10

Value: 3.8

Growth: 6.3

Quality: 5.8

Yield: 4.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

Eastman Chemical

A-Score: 5.1/10

Value: 7.0

Growth: 3.8

Quality: 4.5

Yield: 8.0

Momentum: 1.5

Volatility: 5.7

1-Year Total Return ->

Innospec

A-Score: 4.5/10

Value: 5.0

Growth: 4.1

Quality: 4.8

Yield: 3.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

Olin

A-Score: 4.1/10

Value: 7.1

Growth: 4.3

Quality: 2.4

Yield: 6.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.26%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.80%

Eastman Chemical Company - US2774321002

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on EMN

1.c. Company Highlights

Less Volatile

Higher Yield

Stable Momentum

Earnings Beats

Revenues Beats

Average Growth

Revenues Miss

Fairly Valued

Medium Volatility

Earnings Miss

Average Quality

Weak Momentum

2. Eastman's Q4 2025 Earnings: A Closer Look at Financial Performance

Segment Performance and Outlook

Cost Reduction and Innovation

Valuation and Future Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.45%)

6. Segments

Advanced Materials

Expected Growth: 5.5%

Additives & Functional Products

Expected Growth: 5.8%

Chemical Intermediates

Expected Growth: 5.2%

Fibers

Expected Growth: 5.0%

Other

Expected Growth: 4.8%

7. Detailed Products

Additives

Adhesives and Intermediates

Advanced Materials

Fibers

Specialty Fluids

Specialty Polymers

8. Eastman Chemical Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Eastman Chemical Company passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

79.16$

Current Price

79.16$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA