Analyst Salvator Tiano from Bank of America Securities reiterated a Buy rating on Eastman Chemical (EMN – Research Report) and decreased the price target to $112.00 from $113.00.
Salvator Tiano has given his Buy rating due to a combination of factors, including Eastman Chemical’s solid performance and optimistic future growth projections. In the first quarter of 2024, the company achieved a 2% growth in volume and mix, which was particularly strong in its specialty segments. This growth is expected to accelerate in the latter half of the year, with mid-single-digit increases anticipated. Additionally, the company’s adjusted EBIT for Q1 was higher than expected, suggesting robust earnings growth for the current year and into 2025-26, as the market transitions from destocking to actual end-market growth. This outlook supports Tiano’s reiteration of a Buy rating with a price objective of $112.
Despite a softer second-quarter guide for adjusted EPS, Tiano remains optimistic, raising EPS estimates for 2024 through 2026 based on the strength observed in the Fibers segment and the anticipation of improved earnings in the second half of 2024. Furthermore, Tiano leans favorably towards Eastman Chemical’s methanolysis strategy, despite concerns from investors regarding capital expenditures and customer commitments. The selection of a second US location for methanolysis and ongoing discussions for additional customers, along with a portion of government funding expected to offset some costs, reinforce Tiano’s positive view on the company’s strategic initiatives. Although the timeline for the French plant has been extended, Tiano appreciates the company’s risk mitigation efforts, leading him to maintain a confident stance on Eastman Chemical’s stock.
In another report released today, Jefferies also upgraded the stock to a Buy with a $125.00 price target.
Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of EMN in relation to earlier this year.
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Eastman Chemical (EMN) Company Description:
Eastman Chemical Co. engages in the provision of specialty chemicals. It operates through the following segments: Additives and Functional Products, Advanced Materials, Chemical Intermediates and Fibers. The Additives and Functional Products segment includes chemicals for products in the transportation, consumables, building and construction, animal nutrition, crop protection, energy, personal and home care, and other markets. The Advanced Materials segment produces and markets its polymers, films, and plastics with differentiated performance properties for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets. The Chemical Intermediates segment consists of large scale and vertical integration from the cellulose and acetyl, olefins, and alkylamines streams to support operating segments with advantaged cost positions. The Fiber segment offers cellulose acetate tow for use in filtration media, primarily cigarette filters. The company was founded by George Eastman in 1920 and is headquartered in Kingsport, TN.
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