Eastman Chemical Co (EMN) stock analysis

P/E below its 5-year median

Eastman Chemical's P/E of 12.0 is below its own 5-year median of 13.3.

P/E below the industry

Eastman Chemical's P/E of 12.0 is below the Chemicals and Allied Products median of 25.2.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B below the industry

Eastman Chemical's price-to-book of 1.19 is below the Chemicals and Allied Products median of 1.50.

Trading below fair value

The share price of $65.03 is below our fair value estimate of $92.79.

Margin of safety over 20%

The price is 29.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -6.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -13.6% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -13.3% over the last twelve months, against a 5-year average of -0.2% a year.

Growing slower than the industry

Revenue grew 0.3% over the last twelve months; the Chemicals and Allied Products median is 5.7%.

Guidance raised

Eastman Chemical raised its full-year 2026 operating cash flow outlook on Jul 30, 2026.

Gross margin slipping

Gross margin was 20.6% over the last twelve months, against 22.8% a year earlier.

Return on equity under 15%

Return on equity was 10.4% over the last twelve months and averaged 14.1% over five years; we look for 15% on both.

Return on invested capital

Needs operating income and invested capital.

Return on equity above the industry

Eastman Chemical's return on equity of 10.4% is above the Chemicals and Allied Products median of 3.7%.

Earnings shrank over 5 years

Net income shrank 0.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 6.9% over the last twelve months, against a 5-year average of 8.1%.

Net margin above the industry

Eastman Chemical's net margin of 6.9% is above the Chemicals and Allied Products median of 0.8%.

High debt

Debt is 83.1% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 93.3% five years ago to 83.1%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 16.8% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.57 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.13; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Eastman Chemical paid dividends worth 5.2% of the share price over the last twelve months.

Yield above Treasuries

The 5.2% yield is above the 4.7% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Eastman Chemical yields 5.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 61.1% of net income.

Covered by free cash flow

Dividends take 81.4% of free cash flow.