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Eastman Chemical Co EMN

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Maintaining $125 FVE as Eastman Reports Solid Q3 Results; Shares Slightly Undervalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Eastman reported solid third-quarter results with adjusted EBIT up 44% versus the prior-year quarter. The results were consistent with our outlook for 2021 that Eastman will benefit from strong demand and higher pricing. Amid rising input costs, management narrowed its 2021 adjusted EPS guidance from a range of $8.80-$9.20 per share to a range of $8.80-$9.00. However, we had expected Eastman's 2021 adjusted EPS to come in closer to $9.00 due to rising input costs. As such, our outlook is largely unchanged. Having updated our model to incorporate third-quarter results, we maintain our Eastman fair value estimate of $125 per share. Our narrow-moat rating also is intact.

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Company Profile

Business Description

Established in 1920 to produce chemicals for Eastman Kodak, Eastman Chemical has grown into a global specialty chemicals with manufacturing sites around the world. The company generates the majority of its sales outside of the United States, with a strong presence in Asian markets. During the past several years, Eastman has sold noncore businesses, choosing to focus on higher-margin specialty product offerings.

200 South Wilcox Drive
Kingsport, TN, 37662
T +1 423 229-2000
Sector Basic Materials
Industry Chemicals
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 14,500