Eastman Chemical (EMN): Assessing Valuation After Earnings Miss and Weaker Guidance

Eastman Chemical (EMN) has just reported second quarter results that fell short of what Wall Street was expecting, and the company’s own guidance for the third quarter came in lower than anticipated. Management pointed out tough macroeconomic conditions and ongoing tariff impacts, which seem to be affecting earnings more than expected. For anyone holding EMN or considering a move, these updates have raised significant questions about the company’s next chapter. Over the past year, it has been a challenging period for Eastman Chemical shareholders, with the stock dropping nearly 29% and momentum continuing to decline through the summer. The latest quarterly miss and downward guidance have added further pressure, and it is clear that broader industry and economic headwinds are influencing market sentiment. After this period of weakness, the question remains: is Eastman Chemical now trading at a bargain, or is the market reflecting greater risk and a potentially slower recovery ahead?

Most Popular Narrative: 8.2% Undervalued

According to community narrative, Eastman Chemical is considered modestly undervalued, with analysts projecting a higher fair value than the current share price implies.

"Eastman's ongoing success and expansion in molecular recycling/methanolysis (including debottlenecking at Kingsport and operational improvements) positions the company to capture premium pricing and win volume as regulations and customer demand for recycled content accelerate. This is particularly notable as mechanical recycling underperforms in key end markets, which could drive sustained revenue growth and EBITDA margin expansion."

Curious about how sustainability innovation could supercharge future earnings? This narrative hints at big moves in recycling and specialty materials, all backed by key profit and growth assumptions. The analyst consensus is banking on steady improvements, margin gains, and premium pricing in line with global megatrends. Want to see the exact forecasts and what has to break right for EMN to reach that price target? Take a closer look at the full financial playbook fueling this valuation.

Result: Fair Value of $76.65 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued trade tensions and weak demand in key segments could present challenges to Eastman’s recovery and place future earnings under pressure.

Find out about the key risks to this Eastman Chemical narrative.

Another View: SWS DCF Model Weighs In

Looking beyond analyst expectations, our DCF model takes a fresh perspective on Eastman Chemical's value. This approach suggests the stock could be trading at a significant discount and presents a different angle on the company’s outlook. Which method will ultimately prove right as the story unfolds?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Eastman Chemical for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Eastman Chemical Narrative

If you see things differently or prefer to dive deeper into the numbers yourself, you can shape your own viewpoint in just a few minutes. Do it your way

A great starting point for your Eastman Chemical research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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