Yearly Review of Eastman Chemical Company (EMN)

Over the last year, Eastman Chemical Company logged a negative performance of -27.5%, with a high of $124.85 and a low of $69.91. During this time, the stock trailed the S&P 500 index by -16.2%. As of January 2023, the company's 50-day average price was $85.28. Eastman Chemical Company operates as a specialty materials company in the United States and internationally. Based in Kingsport, TN, the large-cap Basic Materials company has 14,000 full time employees. Eastman Chemical Company has provided a 3.4% dividend yield over the last 12 months.

Growing Revenues With Increasing Reinvestment in the Business:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $9,273 $8,473 $10,476
Revenue Growth n/a -8.63% 23.64%
Gross Margins 24.1% 23.3% 23.9%
Gross Margins Growth n/a -3.32% 2.58%
Operating Margins 14.1% 12.9% 13.8%
Operating Margins Growth n/a -8.51% 6.98%
Earnings Per Share $5.48 $3.5 $6.25
EPS Growth n/a -36.13% 78.57%
Free Cash Flow (MM) $1,079 $1,072 $1,041
FCF Growth n/a -0.65% -2.89%
Capital Expenditures (MM) -$425 -$383 -$578
Net Debt / EBITDA 2.98 3.24 1.95

Eastman Chemical Company's Valuation Is in Line With Its Sector Averages:

Eastman Chemical Company has a trailing twelve month P/E ratio of 9.6, compared to an average of 8.57 for the Basic Materials sector. Based on its EPS guidance of 8.21, the company has a forward P/E ratio of 10.6.

The average annual growth rate of the company's historical and projected earnings per share is 24.67%. On this basis, the company's PEG ratio is 0.39. However, this growth rate is probably not sustainable. In its place we will use the broader market's estimated 5-year EPS growth rate of 13.05%, which gives us a PEG ratio of 0.74. Even with this more conservative assumption on EPS growth, the PEG ratio suggests that Eastman Chemical Company shares are underpriced.

The market is placing a reasonable value on Eastman Chemical Company's book value, since its P/B ratio of 1.9 is comparable to its sector average of 1.86. The company's shares are currently 21.5% above their Graham number, which implies that they are not trading at a fair value in terms of earnings and net assets.

There's an Analyst Consensus of Some Upside Potential for Eastman Chemical Company:

There are 22 analysts covering Eastman Chemical Company, with target prices ranging from $79 to $115 per share, for an average of $93.45. As of January 2023, the company is trading -6.88% away from its average target price, implying there is an analyst consensus of some upside potential. The average rating for Eastman Chemical Company is buy.

With a 1.4% short interest, Eastman Chemical Company has a very low short interest. Institutions own 87.8% of the company's shares, and it has a small amount of insider investors because 0.56% are owned by corporate insiders. Overall, the company's top shareholder is the Vanguard Group, Inc., whose 13% stake in the company is worth around $1,320,609,638.


The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.