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Eastman Chemical (EMN) Set to Increase Prices of Esters

Eastman Chemical CompanyEMN is raising the prices of Esters effective Dec 1, or as contracts permit.

In North and Latin America, the company is lifting off-list prices of Ethyl Acetate, Urethane Grade (all package types) by 5 cents per lb.

Eastman Chemical is taking actions to raise selling prices of its products in the wake of raw material price inflation. Higher selling prices across most product lines contributed to revenue growth across its Additives & Functional Products and Chemical Intermediates segments in the third quarter of 2018.

In a year's time, shares of Eastman Chemical have outperformed the industry it belongs to. Stock has lost around 10.1% compared with the industry's fall of 17.8%.

During the third-quarter earnings call, Eastman Chemical noted that strong volume gains in the specialty businesses, disciplined cost management and a lower effective tax rate helped it achieve year-over-year adjusted earnings per share growth of 13% during the first nine months of 2018. The company continues to expect year-over-year adjusted earnings per share growth of 10-14% for 2018. The company also expects to generate roughly $1.1 billion of free cash flow in 2018.

The company is focused on productivity and cost-cutting actions, which are helping it offset raw material cost inflation and other cost headwinds. In 2018, Eastman Chemical expects to deliver $100 million of savings under its cost-reduction program.

Eastman Chemical has been seeing a rise in raw materials costs, mostly in its chemical intermediates business, as witnessed in the third quarter. Raw materials cost headwind is expected to persist through the remainder of 2018. Nevertheless, the company's productivity and price hike actions are likely to help it offset the input cost pressure.

Eastman Chemical Company Price and Consensus

Eastman Chemical Company Price and Consensus | Eastman Chemical Company Quote

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. CF , The Mosaic Company MOS and Methanex Corporation MEOH , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company's shares have gained 24.9% in the past year.

Mosaic has an expected long-term earnings growth rate of 7%. The stock has rallied 48% in the past year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have gained 11.6% in the past year.

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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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