EASTMAN CHEMICAL CO (EMN)

US2774321002 - Common Stock

96.92  -0.39 (-0.4%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to EMN. EMN was compared to 83 industry peers in the Chemicals industry. EMN has only an average score on both its financial health and profitability. EMN has a valuation in line with the averages, but it does not seem to be growing. EMN also has an excellent dividend rating.



6

1. Profitability

1.1 Basic Checks

EMN had positive earnings in the past year.
EMN had a positive operating cash flow in the past year.
In the past 5 years EMN has always been profitable.
EMN had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 6.27%, EMN is in the better half of the industry, outperforming 79.52% of the companies in the same industry.
With an excellent Return On Equity value of 16.70%, EMN belongs to the best of the industry, outperforming 81.93% of the companies in the same industry.
With a decent Return On Invested Capital value of 6.89%, EMN is doing good in the industry, outperforming 66.27% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for EMN is above the industry average of 6.65%.
Industry RankSector Rank
ROA 6.27%
ROE 16.7%
ROIC 6.89%
ROA(3y)5.68%
ROA(5y)4.95%
ROE(3y)15.6%
ROE(5y)13.49%
ROIC(3y)9.38%
ROIC(5y)8.16%

1.3 Margins

EMN's Profit Margin of 10.16% is amongst the best of the industry. EMN outperforms 81.93% of its industry peers.
In the last couple of years the Profit Margin of EMN has declined.
EMN has a better Operating Margin (11.20%) than 60.24% of its industry peers.
In the last couple of years the Operating Margin of EMN has declined.
The Gross Margin of EMN (22.66%) is comparable to the rest of the industry.
EMN's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 11.2%
PM (TTM) 10.16%
GM 22.66%
OM growth 3Y-0.89%
OM growth 5Y-6.24%
PM growth 3Y19.83%
PM growth 5Y-1.82%
GM growth 3Y-1.35%
GM growth 5Y-1.73%

4

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.
The number of shares outstanding for EMN has been reduced compared to 1 year ago.
EMN has less shares outstanding than it did 5 years ago.
EMN has a better debt/assets ratio than last year.

2.2 Solvency

EMN has an Altman-Z score of 2.58. This is not the best score and indicates that EMN is in the grey zone with still only limited risk for bankruptcy at the moment.
EMN's Altman-Z score of 2.58 is fine compared to the rest of the industry. EMN outperforms 74.70% of its industry peers.
The Debt to FCF ratio of EMN is 9.71, which is on the high side as it means it would take EMN, 9.71 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of EMN (9.71) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.78 indicates that EMN is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.78, EMN is in line with its industry, outperforming 44.58% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.78
Debt/FCF 9.71
Altman-Z 2.58
ROIC/WACC0.94
WACC7.3%

2.3 Liquidity

A Current Ratio of 1.39 indicates that EMN should not have too much problems paying its short term obligations.
EMN's Current ratio of 1.39 is on the low side compared to the rest of the industry. EMN is outperformed by 81.93% of its industry peers.
A Quick Ratio of 0.71 indicates that EMN may have some problems paying its short term obligations.
EMN has a worse Quick ratio (0.71) than 87.95% of its industry peers.
Industry RankSector Rank
Current Ratio 1.39
Quick Ratio 0.71

3

3. Growth

3.1 Past

The earnings per share for EMN have decreased strongly by -13.78% in the last year.
Measured over the past years, EMN shows a decrease in Earnings Per Share. The EPS has been decreasing by -4.79% on average per year.
EMN shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -11.38%.
The Revenue has been decreasing by -1.93% on average over the past years.
EPS 1Y (TTM)-13.78%
EPS 3Y1.39%
EPS 5Y-4.79%
EPS Q2Q%-1.23%
Revenue 1Y (TTM)-11.38%
Revenue growth 3Y2.82%
Revenue growth 5Y-1.93%
Sales Q2Q%-4.23%

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 12.09% yearly.
The Revenue is expected to grow by 1.69% on average over the next years.
EPS Next Y22.01%
EPS Next 2Y19.25%
EPS Next 3Y17.09%
EPS Next 5Y12.09%
Revenue Next Year2.2%
Revenue Next 2Y3.64%
Revenue Next 3Y4.14%
Revenue Next 5Y1.69%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

6

4. Valuation

4.1 Price/Earnings Ratio

EMN is valuated correctly with a Price/Earnings ratio of 15.19.
EMN's Price/Earnings ratio is a bit cheaper when compared to the industry. EMN is cheaper than 74.70% of the companies in the same industry.
When comparing the Price/Earnings ratio of EMN to the average of the S&P500 Index (29.08), we can say EMN is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 10.65, the valuation of EMN can be described as reasonable.
75.90% of the companies in the same industry are more expensive than EMN, based on the Price/Forward Earnings ratio.
EMN is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.74, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 15.19
Fwd PE 10.65

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, EMN is valued a bit cheaper than the industry average as 66.27% of the companies are valued more expensively.
EMN's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 21.8
EV/EBITDA 10.66

4.3 Compensation for Growth

EMN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of EMN may justify a higher PE ratio.
A more expensive valuation may be justified as EMN's earnings are expected to grow with 17.09% in the coming years.
PEG (NY)0.69
PEG (5Y)N/A
EPS Next 2Y19.25%
EPS Next 3Y17.09%

8

5. Dividend

5.1 Amount

EMN has a Yearly Dividend Yield of 3.26%. Purely for dividend investing, there may be better candidates out there.
EMN's Dividend Yield is rather good when compared to the industry average which is at 3.07. EMN pays more dividend than 81.93% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, EMN pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.26%

5.2 History

On average, the dividend of EMN grows each year by 7.23%, which is quite nice.
EMN has paid a dividend for at least 10 years, which is a reliable track record.
EMN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.23%
Div Incr Years14
Div Non Decr Years29

5.3 Sustainability

EMN pays out 40.76% of its income as dividend. 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.
DP40.76%
EPS Next 2Y19.25%
EPS Next 3Y17.09%

EASTMAN CHEMICAL CO

NYSE:EMN (7/23/2024, 11:52:12 AM)

96.92

-0.39 (-0.4%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap11.40B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 3.26%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 15.19
Fwd PE 10.65
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.69
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 6.27%
ROE 16.7%
ROCE
ROIC
ROICexc
ROICexgc
OM 11.2%
PM (TTM) 10.16%
GM 22.66%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.62
Health
Industry RankSector Rank
Debt/Equity 0.78
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.39
Quick Ratio 0.71
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-13.78%
EPS 3Y1.39%
EPS 5Y
EPS Q2Q%
EPS Next Y22.01%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-11.38%
Revenue growth 3Y2.82%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y