Eastman Chemical Co

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EMN : NYSE : Basic Materials
$67.68 up 1.30 | 1.96%
Today's Range: 66.76 - 68.10
Avg. Daily Volume: 1,372,800
09/30/16 - 4:03 PM ET

Financial Analysis


EASTMAN CHEMICAL CO's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. EASTMAN CHEMICAL CO has weak liquidity. Currently, the Quick Ratio is 0.65 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 16.23% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)2297.02533.0
EBITDA ($mil)520.0620.0
EBIT ($mil)376.0478.0
Net Income ($mil)255.0297.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)240.0268.0
Total Assets ($mil)15582.015886.0
Total Debt ($mil)6804.07323.0
Equity ($mil)4375.03764.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin32.6134.03
EBITDA Margin22.6324.47
Operating Margin16.3718.87
Sales Turnover0.590.61
Return on Assets5.684.36
Return on Equity20.2518.43
Debt Q2 FY16 Q2 FY15
Current Ratio1.341.74
Debt/Capital0.610.66
Interest Expense73.072.0
Interest Coverage5.156.64


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)147.66148.61
Div / share0.460.4
EPS1.711.98
Book value / share29.6325.33
Institutional Own % n/a n/a
Avg Daily Volume1474232.01157506.0

Valuation


HOLD. EASTMAN CHEMICAL CO's P/E ratio indicates a significant discount compared to an average of 24.75 for the Chemicals industry and a significant discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 2.22 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 5.71. 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 11.07 Peers 24.75   EMN 6.59 Peers 15.78

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 9.32 Peers 20.26   EMN 0.70 Peers 1.89

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 2.22 Peers 5.71   EMN 28.57 Peers 93.43

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 significantly 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 1.06 Peers 2.31   EMN -5.48 Peers -7.33

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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