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What Analysts Recommend for Eastman Chemical

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Analysts’ consensus on Eastman Chemical

In the past six months, the number of analysts covering Eastman Chemical has remained constant at 17. Among them, 65% of the analysts have recommended the stock as a “buy,” 35% of the analysts have recommended the stock as a “hold,” while none of the analysts have recommended a “sell.”

Analysts’ consensus on EMN’s mean target price is on the rise from $89.92 in July to the current target price of $93.38 as of September 12, 2017. This implies a return potential of 8.3% over the closing price of $86.20 as of September 12, 2017.

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Why analysts are favoring a “buy” for EMN

Eastman Chemical has delivered two quarters of good earnings that beat analysts’ estimates. Looking ahead for the rest of fiscal 2017, EMN’s continued initiative on cost is expected to drive the growth. EMN has also increased the prices of several of its products in the past couple of months, which could improve EMN’s revenues in the coming quarters. Further, EMN has also made an upward revision to its adjusted EPS (earnings per share) for fiscal 2017. Now, EMN expects its adjusted EPS to be 10% to 12% higher than in fiscal 2016. EMN’s previous guidance was in the range of 8% to 12%. These factors could have influenced the majority of analysts to recommend a “buy” on EMN.

Individual recommendations from brokerage firms

  • Suntrust Robinson recommended a target price of $90.00 on the stock, implying a potential return of 4.4% from the closing price as of September 12, 2017.
  • Cowen and Company issued EMN a target price of $92.00, representing a potential return of 6.7% from the closing price of $86.72 as of September 12, 2017.
  • UBS (UBS) increased its target price for EMN to $97.00, which implies a return potential of 12.5% from the closing price of September 12, 2017.

Investors can hold EMN indirectly by investing in the Vanguard Materials ETF (VAW), which invests 1.5% of its portfolio in EMN. The fund has also invested in Monsanto (MON) and Praxair (PX), which have weights of 5.9% and 4.4%, respectively, as of September 12, 2017.

In the next part, we’ll look into EMN’s latest valuation.

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