EASTMAN CHEMICAL CO (EMN) Stock Fundamental Analysis
NYSE:EMN - New York Stock Exchange, Inc. - US2774321002 - Common Stock - Currency: USD
EMN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 85 industry peers in the Chemicals industry. While EMN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. EMN may be a bit undervalued, certainly considering the very reasonable score on growth EMN also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year EMN was profitable.
In the past year EMN had a positive cash flow from operations.
EMN had positive earnings in each of the past 5 years.
EMN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
EMN has a better Return On Assets (6.16%) than 85.88% of its industry peers.
EMN has a Return On Equity of 15.70%. This is amongst the best in the industry. EMN outperforms 83.53% of its industry peers.
EMN has a better Return On Invested Capital (8.81%) than 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EMN is in line with the industry average of 7.09%.
The 3 year average ROIC (8.36%) for EMN is below the current ROIC(8.81%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 15.7% | ||
| ROIC | 8.81% |
ROA(3y)5.82%
ROA(5y)5.19%
ROE(3y)15.81%
ROE(5y)14.08%
ROIC(3y)8.36%
ROIC(5y)8.64%
1.3 Margins
The Profit Margin of EMN (9.85%) is better than 87.06% of its industry peers.
EMN's Profit Margin has improved in the last couple of years.
EMN has a Operating Margin of 14.67%. This is in the better half of the industry: EMN outperforms 78.82% of its industry peers.
In the last couple of years the Operating Margin of EMN has remained more or less at the same level.
EMN has a Gross Margin (24.83%) which is in line with its industry peers.
EMN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.67% | ||
| PM (TTM) | 9.85% | ||
| GM | 24.83% |
OM growth 3Y-7.23%
OM growth 5Y1.24%
PM growth 3Y5.65%
PM growth 5Y3.34%
GM growth 3Y0.75%
GM growth 5Y0.26%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EMN is still creating some value.
Compared to 1 year ago, EMN has less shares outstanding
EMN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, EMN has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.60 indicates that EMN is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.60, EMN is doing good in the industry, outperforming 78.82% of the companies in the same industry.
EMN has a debt to FCF ratio of 8.73. This is a slightly negative value and a sign of low solvency as EMN would need 8.73 years to pay back of all of its debts.
The Debt to FCF ratio of EMN (8.73) is better than 63.53% of its industry peers.
EMN has a Debt/Equity ratio of 0.86. This is a neutral value indicating EMN is somewhat dependend on debt financing.
The Debt to Equity ratio of EMN (0.86) is worse than 61.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 8.73 | ||
| Altman-Z | 2.6 |
ROIC/WACC1.09
WACC8.07%
2.3 Liquidity
EMN has a Current Ratio of 1.72. This is a normal value and indicates that EMN is financially healthy and should not expect problems in meeting its short term obligations.
EMN has a Current ratio (1.72) which is comparable to the rest of the industry.
A Quick Ratio of 0.79 indicates that EMN may have some problems paying its short term obligations.
With a Quick ratio value of 0.79, EMN is not doing good in the industry: 74.12% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
EMN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.37%, which is quite impressive.
EMN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.08% yearly.
EMN shows a small growth in Revenue. In the last year, the Revenue has grown by 2.79%.
The Revenue has been growing slightly by 0.23% on average over the past years.
EPS 1Y (TTM)28.37%
EPS 3Y-3.79%
EPS 5Y2.08%
EPS Q2Q%18.63%
Revenue 1Y (TTM)2.79%
Revenue growth 3Y-3.61%
Revenue growth 5Y0.23%
Sales Q2Q%-0.87%
3.2 Future
EMN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.20% yearly.
Based on estimates for the next years, EMN will show a small growth in Revenue. The Revenue will grow by 2.79% on average per year.
EPS Next Y6.31%
EPS Next 2Y8.22%
EPS Next 3Y9.11%
EPS Next 5Y11.2%
Revenue Next Year1.4%
Revenue Next 2Y2.58%
Revenue Next 3Y2.91%
Revenue Next 5Y2.79%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.51, the valuation of EMN can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of EMN indicates a rather cheap valuation: EMN is cheaper than 87.06% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.22. EMN is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 8.43 indicates a reasonable valuation of EMN.
Based on the Price/Forward Earnings ratio, EMN is valued cheaper than 84.71% of the companies in the same industry.
EMN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.51 | ||
| Fwd PE | 8.43 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EMN is valued a bit cheaper than 72.94% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EMN indicates a somewhat cheap valuation: EMN is cheaper than 71.76% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.65 | ||
| EV/EBITDA | 7.08 |
4.3 Compensation for Growth
EMN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of EMN may justify a higher PE ratio.
PEG (NY)1.51
PEG (5Y)4.59
EPS Next 2Y8.22%
EPS Next 3Y9.11%
5. Dividend
5.1 Amount
EMN has a Yearly Dividend Yield of 4.36%, which is a nice return.
The stock price of EMN dropped by -21.81% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
EMN's Dividend Yield is rather good when compared to the industry average which is at 3.81. EMN pays more dividend than 83.53% of the companies in the same industry.
EMN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.36% |
5.2 History
The dividend of EMN has a limited annual growth rate of 5.58%.
EMN has paid a dividend for at least 10 years, which is a reliable track record.
EMN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.58%
Div Incr Years14
Div Non Decr Years29
5.3 Sustainability
41.21% of the earnings are spent on dividend by EMN. This is a bit on the high side, but may be sustainable.
EMN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.21%
EPS Next 2Y8.22%
EPS Next 3Y9.11%
77.92
+1.7 (+2.23%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners92.8%
Inst Owner Change0.64%
Ins Owners0.72%
Ins Owner Change6.18%
Market Cap9.00B
Analysts76.8
Price Target109.21 (40.16%)
Short Float %3%
Short Ratio2.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.36% |
Yearly Dividend3.26
Dividend Growth(5Y)5.58%
DP41.21%
Div Incr Years14
Div Non Decr Years29
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)9.11%
Min EPS beat(2)-0.03%
Max EPS beat(2)18.25%
EPS beat(4)3
Avg EPS beat(4)7.11%
Min EPS beat(4)-0.03%
Max EPS beat(4)18.25%
EPS beat(8)7
Avg EPS beat(8)5.32%
EPS beat(12)10
Avg EPS beat(12)3.91%
EPS beat(16)11
Avg EPS beat(16)2.69%
Revenue beat(2)0
Avg Revenue beat(2)-2.39%
Min Revenue beat(2)-2.55%
Max Revenue beat(2)-2.22%
Revenue beat(4)1
Avg Revenue beat(4)-0.73%
Min Revenue beat(4)-2.55%
Max Revenue beat(4)2.62%
Revenue beat(8)1
Avg Revenue beat(8)-2.4%
Revenue beat(12)2
Avg Revenue beat(12)-1.74%
Revenue beat(16)6
Avg Revenue beat(16)0.68%
PT rev (1m)-6.09%
PT rev (3m)-5.57%
EPS NQ rev (1m)-19.6%
EPS NQ rev (3m)-22.98%
EPS NY rev (1m)-1.89%
EPS NY rev (3m)-2.47%
Revenue NQ rev (1m)-4.62%
Revenue NQ rev (3m)-5.55%
Revenue NY rev (1m)-0.56%
Revenue NY rev (3m)-2.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.51 | ||
| Fwd PE | 8.43 | ||
| P/S | 0.96 | ||
| P/FCF | 15.65 | ||
| P/OCF | 7.92 | ||
| P/B | 1.53 | ||
| P/tB | 7.45 | ||
| EV/EBITDA | 7.08 |
EPS(TTM)8.19
EY10.51%
EPS(NY)9.24
Fwd EY11.86%
FCF(TTM)4.98
FCFY6.39%
OCF(TTM)9.84
OCFY12.63%
SpS81.08
BVpS50.85
TBVpS10.46
PEG (NY)1.51
PEG (5Y)4.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 15.7% | ||
| ROCE | 10.81% | ||
| ROIC | 8.81% | ||
| ROICexc | 9.1% | ||
| ROICexgc | 14.47% | ||
| OM | 14.67% | ||
| PM (TTM) | 9.85% | ||
| GM | 24.83% | ||
| FCFM | 6.14% |
ROA(3y)5.82%
ROA(5y)5.19%
ROE(3y)15.81%
ROE(5y)14.08%
ROIC(3y)8.36%
ROIC(5y)8.64%
ROICexc(3y)8.83%
ROICexc(5y)9.06%
ROICexgc(3y)15.26%
ROICexgc(5y)15.76%
ROCE(3y)10.04%
ROCE(5y)10.38%
ROICexcg growth 3Y-10.23%
ROICexcg growth 5Y3.54%
ROICexc growth 3Y-9.52%
ROICexc growth 5Y5.53%
OM growth 3Y-7.23%
OM growth 5Y1.24%
PM growth 3Y5.65%
PM growth 5Y3.34%
GM growth 3Y0.75%
GM growth 5Y0.26%
F-Score6
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 8.73 | ||
| Debt/EBITDA | 2.67 | ||
| Cap/Depr | 110.43% | ||
| Cap/Sales | 5.99% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 60.39% | ||
| Profit Quality | 62.36% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 2.6 |
F-Score6
WACC8.07%
ROIC/WACC1.09
Cap/Depr(3y)138.26%
Cap/Depr(5y)116.93%
Cap/Sales(3y)7.09%
Cap/Sales(5y)6.22%
Profit Quality(3y)60.45%
Profit Quality(5y)105.96%
High Growth Momentum
Growth
EPS 1Y (TTM)28.37%
EPS 3Y-3.79%
EPS 5Y2.08%
EPS Q2Q%18.63%
EPS Next Y6.31%
EPS Next 2Y8.22%
EPS Next 3Y9.11%
EPS Next 5Y11.2%
Revenue 1Y (TTM)2.79%
Revenue growth 3Y-3.61%
Revenue growth 5Y0.23%
Sales Q2Q%-0.87%
Revenue Next Year1.4%
Revenue Next 2Y2.58%
Revenue Next 3Y2.91%
Revenue Next 5Y2.79%
EBIT growth 1Y34.61%
EBIT growth 3Y-10.58%
EBIT growth 5Y1.48%
EBIT Next Year54.03%
EBIT Next 3Y19.98%
EBIT Next 5Y18.8%
FCF growth 1Y112.18%
FCF growth 3Y-13.53%
FCF growth 5Y-8.61%
OCF growth 1Y18.83%
OCF growth 3Y-7.36%
OCF growth 5Y-3.07%