On Friday, Mizuho Securities updated its outlook on Eastman Chemical (NYSE:EMN) shares, raising the price target to $102.00 from the previous $91.00. The firm maintained a Neutral rating on the shares.
The adjustment follows Eastman Chemical's first-quarter earnings report for March 2024, which showed earnings per share (EPS) of $1.61, surpassing the consensus estimate of $1.44.
Eastman Chemical reiterated its adjusted EPS guidance for 2024, with a midpoint of $7.63, which is in line with other market expectations. The company's guidance for the second quarter of 2024 indicates an EPS midpoint of $2.00, which is slightly below the Morgan Stanley USA estimate and consensus of $2.21 and $2.10, respectively.
The company experienced a 5% year-over-year decline in adjusted EBITDA for March 2023, recording $401 million compared to the Morgan Stanley USA estimate and consensus of $381 million and $390 million. This decline occurred despite a reported 4% increase in volume and mix.
Eastman Chemical's new Kingsport chemical recycling plant has initiated sales and is projected to contribute approximately $75 million to the company's EBITDA in the second half of 2024. Mizuho's revised price target reflects a roll-forward of higher EPS and an increased multiple among industry peers. The firm's stance remains Neutral despite the improved financial outlook for Eastman Chemical.
InvestingPro Insights
Following Mizuho Securities' updated outlook on Eastman Chemical, it's worth noting that the company's management has been actively enhancing shareholder value, as evidenced by a consistent history of share buybacks and a dividend that has been raised for 14 consecutive years. Eastman Chemical's commitment to shareholder returns aligns with its recent performance metrics, including a P/E ratio of 12.71, suggesting that the stock is trading at a discount relative to its near-term earnings growth potential.
InvestingPro Tips highlight that Eastman Chemical has maintained dividend payments for over three decades, which is a testament to its financial stability and commitment to investors. Additionally, the company's stock has experienced a significant price increase over the last six months, with a 39.6% price total return, indicating strong market confidence. For investors seeking further insights, InvestingPro offers additional tips on Eastman Chemical, which can be accessed through the platform's comprehensive analysis tools at https://www.investing.com/pro/EMN.
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