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Investing.com - RBC Capital has lowered its price target on Eastman Chemical (NYSE:EMN) to $74.00 from $91.00 while maintaining an Outperform rating on the stock. According to InvestingPro data, the stock appears undervalued, trading at an attractive P/E ratio of 8.6x with a dividend yield of 5.46%.
The price target reduction follows Eastman Chemical’s second-quarter earnings miss and lower third-quarter guidance, with the company projecting $1.25 in earnings per share for Q3 compared to $1.60 in Q2, primarily due to inventory destocking. InvestingPro data shows 12 analysts have recently revised their earnings expectations downward, though the company maintains strong fundamentals with a 32-year track record of consistent dividend payments.
Despite near-term challenges, RBC Capital believes next year will likely see a "material step-up" in performance based on several factors, including abating utilization headwinds of approximately $75-100 million in the second half of 2025.
The firm also cited the full-year contribution of Eastman’s approximately $75 million cost-reduction plan, potential additional cost reductions in 2026, and full-year contribution from ramped capacity as positive factors for future performance.
RBC Capital has reduced its EBITDA estimates for Eastman Chemical to $355 million for Q3, $1.545 billion for fiscal year 2025, and $1.70 billion for fiscal year 2026, down from previous estimates of $460 million, $1.725 billion, and $1.85 billion respectively.
In other recent news, Eastman Chemical Company reported its Q2 2025 earnings, which fell short of expectations. The company posted earnings per share of $1.60, missing the forecasted $1.73. Additionally, revenue came in at $2.29 billion, slightly below the anticipated $2.30 billion. In another development, KeyBanc Capital Markets adjusted its outlook on Eastman Chemical by lowering its price target to $79 from $93. Despite the adjustment, KeyBanc maintained an Overweight rating on the stock. The firm cited demand uncertainty as a significant factor, leading to an 18% reduction in its 2025 earnings per share estimate. These developments highlight recent challenges and adjustments faced by Eastman Chemical.
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