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Where Eastman Chemical Plans Its Next Price Hike

Peter Neil - Author

Jul. 18 2017, Updated 9:08 a.m. ET

Eastman announces price hike

On July 14, 2017, Eastman Chemical (EMN) announced the price hike for its acetic anhydride products. Prices will be increased by $0.07 per kilogram and will impact North America and Latin America. These price hikes will be effective from August 1, 2017, or as contracts allow.

Acetic anhydride is used widely, from aspirin production to cigarette filters. The product is part of EMN’s Chemical Intermediates segment, which reported revenues of $670 million in 1Q17—an increase of 8.0% on a year-over-year basis. The new price increase will be more visible in 3Q17 and could have a positive impact on the segment’s revenue, provided the volumes remain constant or increase.

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Eastman’s stock performance

Eastman Chemical gained 1.8% last week (ended July 14, 2017) and closed at $85.40. The stock was trading 6.0% above its 100-day moving average of $80.54, indicating a prevailing upward trend in the stock.

On a year-to-date basis, the stock has returned 13.50%. Analysts expect EMN’s stock price to reach $89.82—an increase of 5.2% over its closing price of $85.4 on July 14. EMN’s 52-week low is $62.70, while its 52-week high is $86.28. EMN’s 14-day relative strength index of 62 indicates that the stock is neither overbought nor oversold.

EMN underperformed the ProShares Ultra Basic Materials (UYM), which has returned 5.0%. UYM has 1.3% of its portfolio in EMN. The top holdings of the fund include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON), which had weights of 7.9%, 7.8%, and 4.5%, respectively, on July 14, 2017.


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