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Eastman Chemical Company (EMN) Stock

Eastman Chemical Company Stock Details, Movements and Public Alerts

Eastman Chemical Company (EMN): The 5.4% Dividend Value Play Trading at 8x Earnings

When Mark Costa became CEO of Eastman Chemical in 2012, he inherited a company too reliant on commodity chemicals facing margin compression. Over the past 13 years, Costa has systematically transformed Eastman's portfolio toward specialty products—BPA-free Tritan copolyester for water bottles, Saflex interlayers for automotive glass, and molecular recycling technology converting plastic waste into virgin-quality materials. Today, 75% of Eastman's $9.2 billion revenue comes from specialty products with differentiated technology, yet the stock trades at a recession-level 8.4x earnings despite 14% ROE and a fortress balance sheet. The market's pessimism seems overdone: Eastman pays a 5.4% dividend (highest in specialty chemicals), generates $1.2 billion in annual free cash flow, and is capturing the circular economy mega-trend through its Advanced Circular Recycling plants. For value investors seeking quality companies trading at distressed multiples, Eastman deserves serious attention.

52-Week Range

$103.22 - $56.08

-41.68% from high · +7.35% from low

Avg Daily Volume

1,950,458

Latest volume

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

8.40

Below market average

Forward P/E

9.40

Earnings expected to decline

PEG Ratio

3.13

Potentially overvalued

Price to Book

1.27

EV/EBITDA

7.01

EPS (TTM)

$7.11

Price to Sales

0.74

Beta

1.30

Similar volatility to market

How is EMN valued relative to its earnings and growth?
Eastman Chemical Company trades at a P/E ratio of 8.40, which is below the market average of approximately 20. This lower valuation could indicate the market has modest growth expectations, or it might represent an undervalued opportunity if the fundamentals are strong. Looking ahead, the forward P/E of 9.40 is higher than the current P/E, indicating analysts expect earnings to decline over the next year. The PEG ratio of 3.13 indicates a premium valuation even accounting for growth.
What is EMN's risk profile compared to the market?
With a beta of 1.30, Eastman Chemical Company is roughly as volatile as the market, moving in line with broad market trends. This moderate beta suggests the stock offers market-level returns without excessive volatility. The price-to-book ratio of 1.27 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

8.96%

Operating Margin

12.40%

EBITDA

$1.84B

Return on Equity

14.40%

Return on Assets

5.54%

Revenue Growth (YoY)

-3.20%

Earnings Growth (YoY)

-38.10%

How profitable and efficient is EMN's business model?
Eastman Chemical Company achieves a profit margin of 8.96%, meaning it retains $8.96 from every $100 in revenue after all expenses. This represents a solid margin typical of well-run businesses, showing the company can effectively balance revenue generation with cost control. The operating margin of 12.40% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 14.40% and ROA at 5.54%, the company achieves moderate returns on invested capital.
What are EMN's recent growth trends?
Eastman Chemical Company's revenue declined by 3.20% year-over-year, indicating challenges in maintaining sales momentum. This contraction may reflect market headwinds, competitive pressures, or strategic transitions. Earnings decreased by 38.10% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against SPECIALTY CHEMICALS industry averages for proper context.

Dividend Information

Dividend Per Share

$3.30

Dividend Yield

5.40%

Ex-Dividend Date

Sep 15, 2025

Dividend Date

Oct 7, 2025

What dividend income can investors expect from EMN?
Eastman Chemical Company offers a dividend yield of 5.40%, paying $3.30 per share annually. This high yield exceeds 4%, significantly outperforming the S&P 500 average of 1.5-2% and most investment-grade bonds. For income-focused investors, this represents an attractive cash flow opportunity, though high yields sometimes signal market concerns about sustainability. To receive the next dividend, shares must be purchased before the ex-dividend date of Sep 15, 2025.
How reliable is EMN's dividend for long-term investors?
The dividend sustainability can be assessed through the payout ratio - Eastman Chemical Company pays $3.30 per share in dividends against earnings of $7.11 per share, resulting in a payout ratio of 46.41%. This balanced payout between 30-60% suggests a sustainable dividend policy that allows both shareholder returns and business reinvestment. The dividend appears well-covered by earnings. The next dividend payment is scheduled for Oct 7, 2025.

Company Size & Market

Market Cap

$6.9B

Revenue (TTM)

$9.29B

Revenue/Share (TTM)

$80.36

Shares Outstanding

114.83M

Book Value/Share

$50.84

Asset Type

Common Stock

What is EMN's market capitalization and position?
Eastman Chemical Company has a market capitalization of $6.9B, classifying it as a mid-cap stock ($2B-$10B). Mid-caps often represent companies in their growth phase, offering higher growth potential than large-caps but with more stability than small-caps. They can be attractive takeover targets and may become tomorrow's large-caps. With 114.83M shares outstanding, the company's ownership is relatively concentrated. As a participant in the SPECIALTY CHEMICALS industry, it competes with other firms in this sector.
How does EMN's price compare to its book value?
Eastman Chemical Company's book value per share is $50.84, while the current stock price is $60.20, resulting in a price-to-book (P/B) ratio of 1.18. This reasonable premium to book value suggests the market values the company's earnings power and intangible assets appropriately. Most profitable companies trade between 1-3x book value. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$74.59

23.90% upside potential

Analyst Recommendations

Strong Buy

3

Buy

9

Hold

5

Sell

0

Strong Sell

0

How reliable are analyst predictions for EMN?
17 analysts cover EMN with 71% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The strong bullish consensus may already be priced in. The consensus target of $74.59 implies 23.9% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on EMN?
Current analyst recommendations:3 Strong Buy, 9 Buy, 5 Hold, 00The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Nov 1, 2025, 02:30 AM

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Eastman Chemical Company (EMN) Stock Analysis 2025: Complete Investment Guide

The Specialty Chemical Stock Mr. Market Forgot

While specialty chemical peers like Sherwin-Williams and PPG trade at 20-25x earnings, Eastman Chemical languishes at just 8.4x despite comparable business quality. The market treats Eastman like a commodity producer destined for margin erosion, ignoring CEO Mark Costa's successful 13-year transformation toward high-value specialty products. This valuation disconnect creates one of the most compelling value opportunities in materials.

Eastman's portfolio spans Advanced Materials (Tritan copolyester, cellulose acetate), Additives & Functional Products (Saflex automotive interlayers, tire additives), Chemical Intermediates (oxo alcohols, specialty plasticizers), and Fibers (acetate tow for cigarette filters). What binds these diverse businesses is specialization: Eastman doesn't compete on volume—it wins through proprietary technology, application expertise, and customer intimacy. The company's $1 billion investment in Advanced Circular Recycling exemplifies this strategy, using molecular depolymerization to convert mixed plastic waste into virgin-quality materials commanding premium pricing.

Business Model & Competitive Moat

Eastman operates an integrated specialty chemicals platform generating $9.2 billion in revenue across four segments: Advanced Materials (25%), Additives & Functional Products (35%), Chemical Intermediates (30%), and Fibers (10%). Unlike commodity chemical producers selling undifferentiated molecules, Eastman develops application-specific solutions requiring deep technical collaboration with customers. A Saflex windshield interlayer isn't just PVB plastic—it's engineered for acoustic dampening, UV protection, and head-impact protection tailored to each automaker's specifications.

The competitive moat stems from three sources: technical expertise accumulated over 100+ years in acetyl chemistry and polymer science, integrated manufacturing providing cost advantages competitors can't replicate without billion-dollar investments, and sticky customer relationships where switching costs are high due to regulatory approvals and application development. Tritan's FDA approval for food contact and decades of safety data create regulatory moats; automotive OEMs won't re-qualify alternative interlayers to save 5%. These advantages enable Eastman to sustain 12-15% EBITDA margins despite exposure to cyclical end markets.

Financial Performance

Eastman's financials reflect a mature, cash-generative specialty chemicals business navigating near-term cyclical headwinds:

  • •Revenue: $9.2B TTM (flat YoY) with volumes recovering from 2023 destocking but pricing normalizing
  • •Profitability: 13.5% EBITDA margin and 14% ROE demonstrate pricing power and capital efficiency
  • •Cash Generation: $1.2B+ annual free cash flow supports dividend, buybacks, and growth investments
  • •Balance Sheet: Investment-grade credit (BBB) with 2.5x net debt/EBITDA providing financial flexibility
  • •Dividend: 5.4% yield with 14-year growth streak, 60% payout ratio, and $600M+ annual commitment
  • •Returns: 14% ROE significantly above cost of capital despite near-term margin compression

Growth Catalysts

  • •Circular Economy Ramp: Advanced Circular Recycling plants in Tennessee and France converting 200M+ lbs annually of plastic waste into premium materials by 2027
  • •Tritan Expansion: BPA-free copolyester growing 10%+ annually as brands shift from polycarbonate, targeting $500M+ revenue
  • •Automotive Recovery: Light vehicle production normalizing to 17M+ units (from 15M pandemic lows) driving Saflex interlayer demand
  • •Specialty Mix Shift: Portfolio optimization toward higher-margin innovations reducing commodity exposure from 25% to sub-20%
  • •Margin Restoration: Energy cost normalization and productivity initiatives targeting 200+ basis points EBITDA margin expansion from 2024 trough

Risks & Challenges

  • •Economic Sensitivity: 40% of revenue tied to automotive, construction, and durable goods—recession could extend volume weakness
  • •Energy Cost Volatility: Natural gas represents 15% of COGS; European operations particularly exposed to energy price spikes
  • •China Competition: Commodity chemical segments face pricing pressure from Chinese producers with lower cost structures
  • •Circular Economy Execution: $1B+ recycling investment requires sustained premium pricing and feedstock availability to generate returns
  • •Dividend Sustainability: 60% payout ratio is safe but limits flexibility if earnings decline 20%+ in deep recession

Competitive Landscape

The specialty chemicals industry is dominated by global giants BASF ($70B revenue), DuPont ($12B), Dow ($45B), and diversified players like Celanese ($10B). Eastman's $9.2B revenue makes it mid-sized, focusing on niches where scale matters less than technical capability. The company competes directly with Celanese in acetyl chemistry, Solvay in specialty polymers, and Arkema in performance materials.

Eastman's competitive positioning balances strengths and challenges. The company lacks the scale of BASF or Dow, limiting purchasing power and R&D budgets. However, Eastman's focused portfolio enables deeper customer relationships and faster innovation in targeted applications. While competitors pursue broad platforms, Mark Costa's strategy emphasizes being #1 or #2 in chosen segments—a discipline that drove divestiture of commodity businesses and acquisition of specialty assets. The molecular recycling investments differentiate Eastman as sustainability concerns grow, creating first-mover advantages in circular plastics.

Who Is This Stock Suitable For?

Perfect For

  • ✓Value investors seeking quality companies at distressed multiples (8.4x P/E)
  • ✓Income investors wanting 5.4% yield plus capital appreciation potential
  • ✓Contrarian investors comfortable buying cyclicals at trough valuations
  • ✓Long-term holders willing to wait 2-3 years for specialty transformation recognition

Less Suitable For

  • ✗Growth investors seeking 15%+ annual returns (expect high single digits)
  • ✗ESG purists concerned about chemical manufacturing environmental footprint
  • ✗Risk-averse investors worried about cyclical earnings volatility
  • ✗Short-term traders (stock can be range-bound during recovery periods)

Investment Thesis

Eastman Chemical's investment case rests on a simple premise: this is a specialty chemicals company being priced like a commodity producer about to go out of business. At 8.4x earnings, the market assumes permanent margin erosion and declining returns. The reality tells a different story: Eastman maintains 14% ROE, generates $1.2 billion in free cash flow, and is positioned to benefit from multi-decade circular economy tailwinds through its Advanced Circular Recycling investments.

Mark Costa's portfolio transformation is real and accelerating. Specialty products now represent 75% of revenue versus 50% when he took over in 2012, with higher margins and more defensible competitive positions. Even if EBITDA margins never return to peak levels, a reversion to 15x earnings (still below historical 16-18x average) implies 80% upside from current $80 levels. Add 5.4% dividend yield, and total returns in the 15-20% range seem achievable over 2-3 years. For patient value investors seeking quality businesses trading at distressed multiples with income, Eastman checks all the boxes.

Conclusion

Eastman Chemical is a BUY for value and income investors seeking quality companies at distressed valuations. The 8.4x P/E multiple prices in excessive pessimism given Eastman's specialty transformation, fortress balance sheet, and 5.4% dividend yield. Even the bear case offers limited downside versus 44-80% base/bull case upside. For investors comfortable with cyclical volatility and willing to wait 2-3 years for earnings recovery, Eastman represents one of the best risk-reward opportunities in specialty materials today. The dividend provides attractive income while waiting for the market to recognize the company's strategic progress.
Bull Case
$145 (80% upside) - Multiple expansion to 15x as specialty transformation recognized, margins recover
Base Case
$115 (44% upside) - Modest multiple expansion to 12x, steady specialty mix improvement
Bear Case
$70 (13% downside) - Recession extends, margins compress further, dividend at risk

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