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Eastman Chemical and Clariant’s Collaboration

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Dec. 17 2018, Updated 9:40 a.m. ET

Eastman and Clariant

On December 12, Eastman Chemical (EMN) announced that it entered into a collaboration with Clariant to distribute its Tamisolve NxG solvent. As a result of the collaboration, Clariant will get permission to globally market and sell Tamisolve NxG under the trade name “Genagen NBP.” However, Eastman Chemical didn’t disclose the financial aspects of the collaboration.

Tamisolve NxG is used in biological control agents, herbicides, fungicides, and insecticides. Dave Watson, Eastman Chemical’s Director for Agriculture Chemical Intermediates, said, “We are delighted to be entering this cooperation agreement with Clariant for the marketing of Genagen NBP, the latest addition to our leading-edge active ingredients portfolio for the agrochemicals industry. Clariant’s formulation know-how and extensive reach into the market will ensure the success of this innovative ingredient.”

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Stock performance

Eastman Chemical fell 2.3% and closed at $71.5 for the week ending on December 14. Eastman Chemical outperformed the First Trust Materials AlphaDEX ETF (FXZ), which fell 2.5%. FXZ invests ~3.0% of its portfolio in Eastman Chemical. FXZ also provides exposure to LyondellBasell (LYB), Westlake Chemical (WLK), and Huntsman (HUN) with weights of 3.2%, 3.2%, and 2.2%, respectively.

The fall in Eastman Chemical’s stock price caused it to trade 20.2% below its 100-day moving average price of $89.62. Eastman Chemical’s 100-day moving average has declined from a high of $104.90 to the current levels, which indicates prevailing weakness in the stock. On a year-to-date basis, the stock has fallen 22.8%.

Analysts expect Eastman Chemical’s target price to be $98.61, which implies a return potential of 37.9% from its closing price on December 14. Eastman Chemical’s 14-day relative strength index of 29 indicates that the stock has moved into an oversold position and can expect some bounce back.

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