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Eastman Chemical (EMN) Hits 52-Week High: What's Driving It?

Shares of chemical maker, Eastman ChemicalEMN touched a fresh 52-week high of $79.15 on Jan 11, before retracing to close the day at $79.07.

Eastman Chemical has a market cap of roughly $11.6 billion and average volume of shares traded in the last three months is around 1,463.6K. The company has an expected long-term EPS growth of around 7.7%.

Eastman Chemical has outperformed the Zacks categorized Chemicals-Diversified industry over the past three months, partly attributable to its forecast-topping earnings performance in third-quarter 2016. The company's shares have gained around 22.8% over this period, compared with roughly 9.9% gain recorded by the industry. Eastman Chemical gained from its cost-reduction actions and strong growth of its high value products in the third quarter.

Driving Factors

Eastman Chemical remains focused on cost cutting and productivity actions amid a still challenging operating environment. The company expects to deliver at least $100 million of cost savings for full-year 2016. Eastman Chemical is also looking to deliver an additional $100 million of cost savings in 2017.

Moreover, Eastman Chemical remains committed to cut debt and enhance shareholder returns. The company cut its net debt by more than $160 million in the third quarter. Its total debt fell roughly 6% year over year to $6,608 million at the end of the quarter.

Eastman Chemical reduced debt by $400 million and returned roughly $325 million to shareholders during the first nine months of 2016 leveraging healthy free cash flows. The company remain on track to generate over $900 million of free cash flows in 2016.

Eastman Chemical's board, early last month, also raised the quarterly cash dividend on the company's common stock by 11% to 51 cents per share. This is for the seventh straight year that the company has increased its dividend.

Eastman Chemical is also gaining from synergies of acquisitions, especially Taminco Corporation. The purchase of Taminco has reinforced the company's foothold in attractive niche end-markets including food, feed and agriculture where Taminco has a strong presence. The acquisition has also provided attractive cost and revenue synergy opportunities.

The acquisition of Solutia also represents a significant step in the company's strategy to boost its foothold in the emerging markets, especially in Asia Pacific.

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

Eastman Chemical Company Price

Eastman Chemical Company Price | Eastman Chemical Company Quote

Other Stocks to Consider

Better-ranked companies in the chemical space include The Chemours Company CC , Kronos Worldwide, Inc. KRO and Methanex Corporation MEOH all holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Chemours has an expected earnings growth of around 60.1% for the current year.

Kronos has an expected earnings growth of around 261.5% for the current year.

Methanex has an expected long-term growth of around 15%.

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Eastman Chemical Company (EMN): Free Stock Analysis Report

Methanex Corporation (MEOH): Free Stock Analysis Report

Kronos Worldwide Inc (KRO): Free Stock Analysis Report

Chemours Company (The) (CC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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