Eastman Chemical (EMN – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Sison from Wells Fargo remains neutral on the stock and has a $89.00 price target.
Geoff Meacham has given his Hold rating due to a combination of factors concerning Eastman Chemical’s recent financial performance and future projections. The company’s fourth-quarter earnings per share (EPS) slightly surpassed expectations, yet there was a noticeable shortfall in EBITDA compared to forecasts. Moreover, while the year-over-year growth in adjusted EPS was impressive, there was a decline when compared quarter-over-quarter. The future guidance provided by the company for the first quarter and full year of 2024 presents midpoints that are below the consensus, which suggests a cautious outlook despite the potential for volume growth as the headwinds from destocking start to ease.
The specifics of the financial guidance indicate mixed trends, with some segments expecting volume and mix growth, while others such as Fibers may see lower volumes. Additionally, a narrowing price-cost scenario due to potential selling price weaknesses, offset by lower maintenance costs, adds to the complexity of the outlook. The wide guidance range for the full year, encompassing potential EBIT improvements from completed destocking and improved asset utilization, is tempered by factors such as higher growth costs and increased depreciation expenses. This intricate mix of positive indications and challenges explains the Hold rating, signaling a wait-and-see approach as the company navigates the forecasted conditions.
Sison covers the Basic Materials sector, focusing on stocks such as Albemarle, Avient, and Ashland. According to TipRanks, Sison has an average return of 7.6% and a 55.71% success rate on recommended stocks.
In another report released yesterday, Barclays also assigned a Hold rating to the stock with a $85.00 price target.
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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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