15 Sep

What Eastman Chemical’s Valuations Suggest


Eastman Chemical’s forward PE

After looking at analysts’ views and recommendations, we’ll look into Eastman Chemical’s (EMN) latest valuation in comparison to its peers. As of September 12, 2017, EMN’s one-year forward price-to-earnings multiple stands at 10.85x, while peer LyondellBasell’s (LYB) one-year forward PE multiple stands at 10.15x.

What Eastman Chemical’s Valuations Suggest

The forward PE is one of the many valuation tools that consider forward earnings. This could be a useful tool for investors to compare between two or more companies that are operating in the same industry and compare which company is overvalued and which company is undervalued. This also tells how much the investors are paying for a stock per dollar of its expected earnings over the next 12 months.

Eastman valuations edge past peers

At present, EMN is trading at a premium compared to its peer LyondellBasell with a marginal difference. After EMN reporting two quarters of strong earnings, analysts are expecting the company to post earnings per share of $7.52 for fiscal 2017, an increase of 11.2% on a year-over-year basis. The earnings growth is expected to be driven by better cost control measures and improved sales. For fiscal 2018, analysts forecast EMN’s earnings to be at $8.15, which is 8.4% above fiscal 2017 earnings.

In contrast, analysts are projecting LYB’s earnings per share to be at $9.89 in fiscal 2017, an increase of 6.8% over fiscal 2016 earnings. However, for fiscal 2018, the earnings growth is expected to fall to $9.08 per share, representing a fall of 8.2% over fiscal 2017 earnings. Since EMN’s expected earnings growth is stronger than LYB’s, EMN stock is trading at a premium.

Investors looking to hold EMN indirectly can invest in the ProShares Ultra Basic Materials (UYM), which invests 1.3% of its portfolio in EMN. The other holdings of the fund include Praxair (PX) and Monsanto (MON), which have weights of 3.9% and 5.2%, respectively, as of September 12, 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.