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Update on Eastman Chemical’s Higher Product Prices

Peter Neil - Author

Mar. 19 2018, Updated 2:17 p.m. ET

Eastman Chemical hikes product prices

On March 16, 2018, Eastman Chemical (EMN) announced price hikes for certain products. The price hikes will be effective on April 1, 2018, or as the contract allows. The price hikes will likely impact the US and North America. The following are the details of the price increase:

  • The benzoic acid price is slated to increase by $0.03 per pound.
  • NPG (all package types) prices are slated to increase by $0.03 per pound in North America.

Eastman cited increased raw material prices as the reason for the price hikes. The price hikes could be positive for Eastman Chemical’s revenue growth if the volumes don’t decline. The impact of the price increase will likely be more visible in 2Q18. Eastman Chemical reported its 4Q17 revenue at $2.36 billion compared to $2.18 billion in 4Q16—an increase of 8.3% on a year-over-year basis.

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Eastman Chemical’s stock price movements

Eastman Chemical stock declined 0.9% and closed at $107.79 for the week ending March 16, 2018. The stock is trading 12.2% above the 100-day moving average price of $96.07, which indicates the upward trend in the stock. On a year-to-date basis, the stock has gained 16.4%. In comparison, Westlake Chemical (WLK) has gained 8.8%, while Huntsman (HUN) and LyondellBasell (LYB) have declined 6.5% and 2.9%, respectively. Eastman Chemical’s 14-day relative strength index of 63 indicates that the stock isn’t overbought or oversold.

Eastman Chemical also outperformed the First Trust Materials AlphaDEX Fund (FXZ), which declined 1.9%. FXZ has invested 3.9% of its portfolio in Eastman Chemical as of March 16, 2018.

Correction: An earlier version of this article suggested that the benzoic acid price would rise by $0.22 per pound. The accurate figure is an increase of $0.03 per pound. We regret this error.


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