29 Mar

Inside Eastman Chemical’s Latest Valuations


Eastman Chemical’s forward PE

In the previous part of this series, we analyzed the analysts’ recommendations for Eastman Chemical (EMN). In this final part, we’ll compare EMN’s valuations with those of its peers.

On March 28, 2017, EMN was trading at a one-year forward PE (price-to-earnings) multiple of 10.70x, as compared to peers Dow Chemical (DOW), DuPont (DD), and LyondellBasell (LYB), which were trading at a one-year forward PE multiple of 15.50x, 21.80x, and 9.20x, respectively, on the same day.

Inside Eastman Chemical’s Latest Valuations

Remember, the forward PE ratio is a relative valuation method that considers a company’s future earnings for calculation. The forward PE ratio tells how much the investors are paying for a stock per dollar of expected earnings over the next 12 months.

Forward PE represents one of the most popular valuation tools because it helps investors compare two or more companies that operate in the same industry, clarifying which stock could be overvalued or undervalued.

EMN trades in between DOW and LYB

On March 28, 2017, EMN was trading at a discount to DOW and at a premium to LyondellBasell. Historically, EMN has traded at a discount to Dow Chemical, but as DOW is expecting to complete a merger deal with DuPont—along with the completion of its integration of Corning—DOW expects to see higher earnings going forward.

Meanwhile, EMN and LYB are struggling to achieve revenue growth. EMN’s revenue is projected to grow in 2017, as compared to 2016, primarily driven by the price hike in its products. EMN has guided its adjusted EPS (earnings per share) to grow at a rate of 8%–10% in 2017, as compared to 2016.

Notably, investors can hold Eastman Chemical indirectly by investing in the ProShares Ultra Basic Materials (UYM), which had 1.4% of its holdings in EMN on March 28, 2017.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.