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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 Company's recent performance was negatively impacted by persistent tough industry conditions, weak demand, and tariffs. The company's Q2 earnings and sales missed estimates, with earnings of $1.6 per share, down from $2.15 per share a year ago. Weak end markets and soft demand weighed on its performance. Despite this, the company has been taking steps to advance sustainable textile innovation, including a new partnership with Huafon to build a yarn facility in China. Earnings estimates continue to fall. (Source: Zacks Consensus Estimate)

1.c. Company Highlights

2. Eastman Chemical's Earnings Report: A Mixed Bag

Eastman Chemical reported revenues that were in line with expectations, but earnings per share (EPS) came in at $1.14, slightly below the estimated $1.18. The company's gross margin was impacted by asset utilization headwinds, higher energy costs, and soft demand in certain markets. The reported EPS translates to a price-to-earnings (P/E) ratio of 10.02, indicating that the stock is fairly valued relative to its earnings.

Publication Date: Nov -08

📋 Highlights
  • 2026 EBITDA Target: Cost savings and asset utilization reversal aim to offset $20 million Fibers headwinds, with normalized EBITDA of $2 billion achievable via volume stabilization.
  • Kingsport rPET Conversion: On-track for production targets; debottlenecking will delay second plant to enhance capital efficiency, reducing CAPEX by 20%.
  • Pepsi Contract Restructuring: Volume pulled forward into 2026 ensures price stability and mitigates tow market destocking risks, avoiding financial downside.
  • Dividend Sustainability: 15 consecutive annual increases, with $1 billion in dividends deemed achievable by 2026 via cash flow growth and debt reduction.
  • Market Outlook: Stable markets (low single-digit growth) and asset utilization tailwinds in 2026 contrast with 4% AM and 2% AFP volume declines in 2024.

Segment Performance

The company's Fibers segment faced challenges, including a decline in tow volume due to destocking and a $30 million headwind from tariffs in the textiles business. However, the company remains confident in its ability to rebuild this business and gain share in other markets. The Advanced Materials (AM) and Adhesives, Plastics, and Films (AFP) segments also experienced volume declines, but the company expects easy comparisons in the second half of the year.

Cost Savings and Innovation

Eastman Chemical is focused on reducing costs, with a 7% headcount reduction announced during the quarter. The company is also leveraging AI to reduce costs and improve speed to market. Mark Costa, the company's CEO, emphasized that the cost reductions are driven by productivity and being competitive in manufacturing and functional areas. The company's innovation-centric strategy is expected to drive growth, with a focus on winning share in various markets and expanding into new applications.

Outlook and Valuation

Analysts estimate revenue growth of 1.2% for next year, indicating a moderate pace of growth. The company's dividend yield of 5.42% is attractive, and the dividend has been increased for 15 consecutive years. The price-to-book (P/B) ratio of 1.2 and enterprise value-to-EBITDA (EV/EBITDA) ratio of 8.08 suggest that the stock is reasonably valued relative to its book value and earnings. With a return on equity (ROE) of 12.08% and a return on invested capital (ROIC) of 7.42%, the company is generating decent returns on its equity and invested capital.

Conclusion

Eastman Chemical's earnings report was mixed, with EPS coming in below estimates. However, the company is taking steps to reduce costs and drive growth through innovation. The stock's valuation metrics suggest that it is fairly valued, but the attractive dividend yield and decent returns on equity and invested capital make it a reasonable investment opportunity.

3. NewsRoom

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Eastman Increases Dividend for 16th Consecutive Year

Dec -04

Source: businesswire.com

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Value Fund Dumps $10.1 Million Eastman Chemical Stake as Stock Slump Continues and EBIT Drops 43%

Dec -04

Source: fool.com

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Why Is Eastman Chemical (EMN) Up 0.4% Since Last Earnings Report?

Dec -03

Source: zacks.com

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Eastman Chemical Company (EMN) Presents at Citigroup 2025 Basic Materials Conference Transcript

Dec -02

Source: seekingalpha.com

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Advisors Asset Management Inc. Decreases Holdings in Eastman Chemical Company $EMN

Dec -01

Source: defenseworld.net

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Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

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Eastman CFO Willie McLain to address the Citi Basic Materials Conference

Nov -25

Source: businesswire.com

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Creative Planning Sells 2,006 Shares of Eastman Chemical Company $EMN

Nov -24

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

Strength

Weaknesses

Opportunities

Threats

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

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NewMarket

A-Score: 6.7/10

Value: 4.5

Growth: 7.2

Quality: 7.2

Yield: 3.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Cabot

A-Score: 5.5/10

Value: 7.1

Growth: 6.4

Quality: 6.0

Yield: 5.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
RPM International

A-Score: 5.2/10

Value: 3.6

Growth: 6.6

Quality: 5.7

Yield: 4.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Eastman Chemical

A-Score: 5.0/10

Value: 6.9

Growth: 3.8

Quality: 5.1

Yield: 8.0

Momentum: 0.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Innospec

A-Score: 4.3/10

Value: 3.4

Growth: 4.1

Quality: 5.4

Yield: 3.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Olin

A-Score: 3.7/10

Value: 5.5

Growth: 4.4

Quality: 2.0

Yield: 6.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

61.53$

Current Price

61.53$

Potential

-0.00%

Expected Cash-Flows