Back to rankings

Eastman Chemical Company (EMN)

Undervalued
Basic MaterialsSpecialty ChemicalsUnited States

Fundamental

62

Price

$64.84

Market Cap

$7.57B

Part 1 · What the company is worth

Overview

Eastman Chemical makes chemicals, plastics and fibers that other manufacturers use as inputs, from specialty films and coatings additives to basic petrochemical building blocks and acetate tow for cigarette filters. Rather than mining or drilling for its own feedstocks, it buys raw materials and energy and converts them, at large integrated plants such as its Kingsport, Tennessee site, into products used in automotive interlayers, food and personal-care ingredients, agricultural additives, and textile and packaging materials.

How it makes money

Eastman sells to other manufacturers as an input supplier rather than to consumers, so its revenue depends on the volumes and prices its industrial customers are willing to pay, both of which move with raw-material and energy costs it does not control. Advanced Materials and Additives & Functional Products, its specialty businesses, carry steadier prices and margins; Chemical Intermediates and Fibers behave more like commodity chemicals, with revenue falling double digits in 2025 as prices and volumes both softened.

Revenue by segment

Advanced Materials33%

Specialty plastics, films and interlayers used in automotive glass, eyewear, packaging and other differentiated applications; the largest segment.

Additives & Functional Products33%

Additives for coatings, agriculture, personal care, aviation fluids and water treatment; the only segment whose revenue grew in 2025.

Chemical Intermediates22%

Basic and intermediate chemicals sold to other manufacturers as building blocks; more commodity-like, with revenue down 10% in 2025 on lower prices and volumes.

Fibers12%

Acetate tow, used mainly in cigarette filters, and acetate yarns; revenue fell 20% in 2025 as volumes declined.

Competitive moat

Cost advantage · Narrow

Eastman describes a competitive advantage from its low-cost manufacturing base, built on vertically integrated sites such as Kingsport that lower logistics costs and speed up scale-up from research to production, combined with proprietary process technology such as its oxo chemistry and a portfolio of thousands of active patents. This helps in its specialty product lines, but the Chemical Intermediates and Fibers segments still compete largely on price against other bulk chemical producers.

What drives demand

Cyclical

Eastman states that its coatings-additives and chemical-intermediates product lines in particular are exposed to the cyclicality of their end markets, with periods of supply and demand imbalance driven by general economic conditions, raw material and energy prices, and consumer demand. Advanced Materials and Additives & Functional Products carry further exposure to consumer discretionary spending.

Key risks

  • Raw material and energy cost volatility — The company relies on strategic raw material and energy commodities whose cost and availability can be hurt by economic conditions, severe weather, supply chain disruption, regulation and currency swings, adversely affecting financial results.
  • Customer concentration — Despite an extensive customer base, the company states that the loss of, or material financial weakness at, certain of its largest customers could adversely affect its financial condition until that business is replaced.
  • Cyclicality of key end markets — Eastman discloses that several of its product lines are cyclical, moving through periods of supply and demand imbalance tied to general economic conditions and consumer demand rather than to steady, predictable order patterns.

The case for

Buyers argue that vertically integrated, low-cost sites and proprietary process technology give Eastman's specialty Advanced Materials and Additives & Functional Products segments a durable cost and product edge, that cost-cutting has kept cash flow close to $1 billion even as revenue fell, and that a cyclical downturn in Chemical Intermediates and Fibers should eventually turn.

The case against

Sellers worry that Chemical Intermediates and Fibers behave like commodity businesses with revenue down 10% and 20% respectively in 2025, that raw material and energy costs the company cannot control squeeze margins in weak periods, and that a cyclical downturn could persist longer than the 2025 cost-cutting response can offset.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

Compare

Generated on September 18, 2026 with claude-haiku-4-5 — shared with all users

P/E: —Score: 48Market cap: $20.10B

Dow is named by Eastman as a competitor in both additives and chemical intermediates, selling overlapping olefin- and oxo-derived chemistries to the same coatings, adhesives and industrial buyers.

BASF SEBFFAF
P/E: 7.5Score: 61Market cap: $46.25B

BASF is listed by Eastman among its competitors in additives and functional products, offering rival coatings additives, plasticizers and tire chemicals to the same formulators.

Celanese CorporationCE

Eastman names Celanese as a competitor in three of its four segments, and the two fight for the same acetyl-chain intermediates, coatings additives and acetate tow customers worldwide.

Covestro AG1COV

Covestro competes head-on with Eastman's Advanced Materials segment in engineering plastics such as polycarbonate and copolyester for consumer durables, medical devices and automotive parts.

Trinseo PLCTSE

Trinseo competes with Eastman in specialty plastics and engineered polymers, targeting the same automotive, appliance and packaging converters, including on recycled-content grades.

Daicel Corporation (ダイセル)4202

Daicel is one of the few producers worldwide of cellulose acetate flake and tow, competing directly with Eastman's Fibers segment for filtration-media and cigarette-filter customers.

Balance Sheet & Liquidity

Revenue

$8.87B

Trailing 12 months (through 6/30/2026)

Net Income

$442M

Trailing 12 months (through 6/30/2026)

Free Cash Flow

$424M

Total Equity

$5.96B

Total Liabilities

$8.82B

Current Ratio

1.50

Interest Coverage

-

Debt/EBITDA

3.75

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

CyclicalUndervalued

Fair Value

$120.12

Current Price

$64.84

Margin of Safety

+46.0%

Fair Value Range

$78.08 - $162.16

Spread across the valuation methods used, not a statistically calibrated confidence interval.

Estimation Methods

Analyst price target:$81.47
Discounted cash flow (DCF):Not applicable to this type of company
Earnings multiple (P/E):$38.06
Graham growth formula:Not applicable to this type of company
Earnings power value (EPV):$48.70
Justified P/B:Not applicable to this type of company
Dividend discount (Gordon):Not applicable to this type of company
P/FFO, funds from operations:Not applicable to this type of company
Mid-cycle earnings:$195.43
Revenue multiple:Not applicable to this type of company
Analyst Consensus:Buy (13B / 9H / 0S)
Last Earnings Surprise:+7.37%

Valuation Metrics

P/E Ratio

16.84

ROE

8.0%

P/B Ratio

1.22

P/FCF

13.76

Gross Margin

19.9%

ROIC

-

Profitability Radar

Value Creation (Economic Moat)

ROIC

-

WACC

7.5%

ROIC − WACC

-

Fundamental Analysis Criteria

Passed (14)

  • EPS shows upward trend
  • P/FCF 13.76
  • P/B Ratio 1.22
  • Debt/Equity ratio
  • Positive Free Cash Flow
  • Current Ratio
  • Debt/EBITDA
  • Return on Tangible Assets
  • Price below Graham Number
  • DCF valuation (Undervalued)
  • Analyst Consensus 59% Buy
  • Earnings Quality (OCF/NI) 2.24
  • Share Dilution -2.0%
  • Piotroski F-Score 5/9

Failed (10)

  • EPS CAGR 0.36%
  • Price CAGR -1.18%
  • Gross Margin 19.9%
  • CapEx intensity
  • Low reliance on intangibles
  • ROE 7.4%
  • Revenue Growth 5Y 0.7%
  • Earnings Surprise avg -6.0%
  • PEG Ratio 5.19
  • Net Margin Trend 5.0% vs 9.0%

Unavailable (4)

  • ROIC NaN%
  • Dividend Payout NaN%
  • Operating Margin NaN%
  • Interest Coverage

Piotroski F-Score

5/9

Mixed signals: some areas need attention

score
criteria

Earnings Quality

2.24

High quality: earnings backed by cash

Share Dilution

-2.0%

Buying back shares. Shareholder friendly

Institutional Holdings

Governance

Executive Team

NameTitleAge
Mr. Mark J. CostaChairman & CEO59
Mr. William Thomas McLain Jr.CFO & Executive VP52
Mr. Brad A. LichExecutive VP & Chief Commercial Officer57
Mr. B. Travis SmithExecutive VP of Additives & Functional Products, Manufacturing, WWE&C and HSE51
Ms. Michelle R. StewartVP, Chief Accounting Officer & Controller53
Mr. Stephen Glenn CrawfordEVP, CTO & Chief Sustainability Officer60
Mr. Gregory A. RiddleVice President of Investor Relations & Communications56
Ms. Ike AdeyemiSenior VP, Chief Legal Officer & Corporate Secretary47
Mr. Adrian J. HoltSenior VP & Chief Human Resources Officer56
Mr. J. P. KuijpersMD of EMEA Region & Global Procurement Director-

Audit Risk

3

Board Risk

3

Compensation Risk

4

Shareholder Rights Risk

2

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Documents

  • Annual Report (10-K)

    A yearly overview of the business, its financial results, and the risks it faces.

    Filed on 2026-02-13

    View document
  • Quarterly Report (10-Q)

    A snapshot of financial performance for the most recent three-month period.

    Filed on 2026-07-31

    View document
  • Current Report (8-K)

    An announcement of a major event, such as a leadership change or big news.

    Filed on 2026-07-30

    View document

via SEC EDGAR

Income History

via SEC EDGAR

Latest News

Recent headlines for EMN, sourced from Markets Gazette.

No recent news for EMN.