Eastman Chemical Co

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EMN : NYSE : Basic Materials
$71.93 | %
Today's Range: 71.53 - 72.50
Avg. Daily Volume: 1,301,000
07/22/16 - 4:01 PM ET

Financial Analysis


EASTMAN CHEMICAL CO's gross profit margin for the first quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. EASTMAN CHEMICAL CO has weak liquidity. Currently, the Quick Ratio is 0.71 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 22.10% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)2236.02443.0
EBITDA ($mil)553.0580.0
EBIT ($mil)406.0435.0
Net Income ($mil)251.0171.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)202.0196.0
Total Assets ($mil)15616.015834.0
Total Debt ($mil)7078.07644.0
Equity ($mil)4204.03443.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin34.9333.07
EBITDA Margin24.7323.74
Operating Margin18.1617.81
Sales Turnover0.60.61
Return on Assets5.944.35
Return on Equity22.0719.95
Debt Q1 FY16 Q1 FY15
Current Ratio1.551.79
Debt/Capital0.630.69
Interest Expense73.072.0
Interest Coverage5.566.04


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)147.79148.61
Div / share0.460.4
EPS1.691.14
Book value / share28.4523.17
Institutional Own % n/a n/a
Avg Daily Volume1315977.01399742.0

Valuation


BUY. EASTMAN CHEMICAL CO's P/E ratio indicates a significant discount compared to an average of 24.51 for the Chemicals industry and a significant discount compared to the S&P 500 average of 25.03. To use another comparison, its price-to-book ratio of 2.52 indicates valuation on par with the S&P 500 average of 2.80 and a significant discount versus the industry average of 6.23. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, EASTMAN CHEMICAL CO proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
EMN 11.55 Peers 24.51   EMN 6.75 Peers 15.60

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

EMN is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

EMN is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
EMN 9.20 Peers 19.73   EMN 0.50 Peers 2.41

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

EMN is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

EMN trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
EMN 2.52 Peers 6.23   EMN 36.18 Peers 44.40

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

EMN is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, EMN is expected to trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EMN 1.12 Peers 2.16   EMN -2.32 Peers -5.99

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

EMN is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

EMN has a sales growth rate that significantly exceeds its peers.

 

 

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