Kingsport, Tennessee-based Eastman Chemical Company (EMN), is a company specializing in specialty chemical materials producing chemicals, fibers, and plastics. With a market cap of $10.6 billion, the company offers a wide range of products including coatings, adhesives, specialty polymers, inks, fibers, performance chemicals and intermediates, performance polymers, and specialty plastics
Companies worth $10 billion or more are generally described as “large-cap stocks,” and EMN fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the specialty chemicals industry. EMN has strengthened its market position through its global footprint and specialty product focus. Driven by its strong brand and loyal customer base its extensive intellectual property portfolio enables product differentiation, and significant investments in innovation and technology, enhancing its competitive edge in the market.
Despite its notable strength, EMN slipped 20.3% from its 52-week high of $114.50, achieved on Sep. 27. Over the past three months, EMN stock declined 15.6%, underperforming the Dow Jones Industrials Average’s ($DOWI) 1.9% gains during the same time frame.
In the longer term, shares of EMN dipped 7.5% over the past six months but climbed 1.7% over the past 52 weeks, underperforming DOWI’s six-month gains of 9.6% and solid 14.8% returns over the last year.
To confirm the bearish trend, EMN has been trading below its 50-day moving average since late October. The stock is trading below its 200-day moving average since early December.
EMN is facing difficulties due to subdued demand in the building and construction, consumer durables, and electronics segments in most of the regions. Additionally, fluctuating propane prices and rising raw material costs may further impact its margins.
On Oct. 31, EMN reported its Q3 results, and its shares closed down more than 3% in the following trading session. The company’s adjusted EPS of $2.26, surpassed analyst estimates of $2.13. Its revenue was $2.5 billion, beating Wall Street forecasts of $2.4 billion.
In the competitive arena of specialty chemicals, PPG Industries, Inc. (PPG) lagged behind the stock, declining 6.6% over the past six months and 19.2% over the past 52 weeks.
Wall Street analysts are moderately bullish on EMN’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it, and the mean price target of $116.47 suggests a potential upside of 27.7% from current price levels.
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