Eastman Chemical Co

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EMN : NYSE : Basic Materials
$77.2 | %
Today's Range: 76.83 - 77.67
Avg. Daily Volume: 1540200.0
12/09/16 - 4:02 PM ET

Financial Analysis


EASTMAN CHEMICAL CO's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. EASTMAN CHEMICAL CO has weak liquidity. Currently, the Quick Ratio is 0.62 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 14.54% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)2287.02447.0
EBITDA ($mil)531.0601.0
EBIT ($mil)386.0459.0
Net Income ($mil)232.0256.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)207.0309.0
Total Assets ($mil)15489.015880.0
Total Debt ($mil)6608.07280.0
Equity ($mil)4441.03877.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin33.4934.21
EBITDA Margin23.2124.56
Operating Margin16.8818.76
Sales Turnover0.580.62
Return on Assets5.564.65
Return on Equity19.4119.08
Debt Q3 FY16 Q3 FY15
Current Ratio1.311.77
Debt/Capital0.60.65
Interest Expense73.071.0
Interest Coverage5.296.46


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)146.75148.56
Div / share0.460.4
EPS1.561.71
Book value / share30.2626.1
Institutional Own % n/a n/a
Avg Daily Volume1517295.01401345.0

Valuation


BUY. EASTMAN CHEMICAL CO's P/E ratio indicates a significant discount compared to an average of 28.45 for the Chemicals industry and a significant discount compared to the S&P 500 average of 25.22. To use another comparison, its price-to-book ratio of 2.47 indicates a discount versus the S&P 500 average of 2.79 and a significant discount versus the industry average of 5.27. 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 12.89 Peers 28.45   EMN 7.04 Peers 14.24

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 10.52 Peers 20.67   EMN 0.81 Peers 2.23

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 2.47 Peers 5.27   EMN 17.20 Peers -8.90

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.

 

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

EMN is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EMN 1.21 Peers 2.25   EMN -7.44 Peers -6.02

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

EMN significantly trails its peers on the basis of sales growth

 

 

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