Eastman Chemical (EMN): Valuation Revisited After S&P 500 Exit and Weaker Q3 Results

Eastman Chemical (EMN) has reported third-quarter earnings that came in below expectations, with both sales and net income down from last year. The company was also recently removed from the S&P 500 and added to smaller-cap indices. This change could potentially shift investor sentiment.

See our latest analysis for Eastman Chemical.

The shakeup in Eastman Chemical’s index status, along with softer quarterly numbers, has weighed on investor sentiment. The stock is trading at $61.09, and its -30.99% share price return year-to-date signals fading momentum. Over the past year, the total shareholder return is down 38.6%, pointing to a challenging period for longer-term holders.

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With shares trading well below recent price targets and the company undergoing dramatic changes, the question remains: is Eastman Chemical undervalued today, or is the market already factoring in its prospects for future growth?

Most Popular Narrative: 18.1% Undervalued

According to the most widely followed narrative, Eastman Chemical’s estimated fair value stands meaningfully above the recent close. Such a gap naturally draws attention to the bold drivers behind this valuation thesis.

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, particularly as mechanical recycling underperforms in key end markets. This drives sustained revenue growth and EBITDA margin expansion.

Read the complete narrative.

The hidden math could catch you off guard. The future price hinges on a unique blend of margin expansion, falling share count, and one bold earnings projection. Want to see the controversial forecasts behind the price target? Find out what sets this calculation apart by reading the full perspective now.

Result: Fair Value of $74.59 (UNDERVALUED)

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

However, persistent global trade pressures or weak adoption of innovative products could quickly undermine the bullish recovery thesis for Eastman Chemical.

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

Build Your Own Eastman Chemical Narrative

If you see the story differently or want to dig into the numbers yourself, take just a few minutes to craft your own perspective. Do it your way.

A great starting point for your Eastman Chemical research is our analysis highlighting 4 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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