Eastman Chemical to expand production capacity

On August 23, 2017, Eastman Chemical (EMN) announced its plan to expand its copolyester site in Kuantan, Malaysia. The site expansion is expected to increase the production of PETG (polyethylene terephthalate glycol) by 20% over its existing capacity.

EMN expects the expansion activity to be completed by 1Q18, and the expansion is expected to help meet the growing demand for copolyester products.

Eastman Chemical to Increase Its Copolyester Production Capacity

This move should be a positive one for EMN’s Advanced Materials segment once the expansion is complete and should help it improve revenues. In 2Q16, the segment reported revenues of $657 million, implying a growth of 1% on a YoY (year-over-year) basis. With new expansion capacity, EMN hopes that the segment’s revenues and income will grow in a big way.

Burt Capel, Eastman Chemical’s vice president and general manager of Specialty Plastics, stated: “This expansion positions Eastman to meet the increasing global demand we’re seeing for our copolyester materials. This investment further solidifies Eastman’s commitment to the Asia-Pacific region and to providing our customers around the world with the highest quality materials in the market.”

Eastman’s stock performance last week

Eastman Chemical had a good week last week (ended August 25, 2017), gaining 2.4% to close the week at $84.87. EMN continued its upward trend and traded 3.4% above its 100-day moving average price of $82.11.

On a YTD (year-to-date) basis, the stock has returned 12.8%. Analysts see a further upside in the stock and have recommended a target price of $92.13 over the next 12 months, implying a return potential of 8.5% over its closing price on August 25, 2017. EMN’s RSI (relative strength index) of 55 suggests that the stock is neither overbought nor oversold.

Investors looking for indirect exposure to Eastman can invest in the ProShares Ultra Basic Materials (UYM), which has 1.3% of its portfolio in EMN. UYM also provides exposure to Dow Chemical (DOW), Praxair (PX), and Monsanto (MON), which had weights of 7.7%, 4.0%, and 5.5%, respectively, as of August 25, 2017.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.