Here's Why You Should Hold Onto Eastman Chemical Stock for Now

Eastman Chemical Company EMN is benefiting from cost-cutting and productivity actions as well as its innovation-driven growth model amid challenges from soft demand in certain markets.Shares of EMN are up 22.8% over the past year compared with the Zacks Chemicals Diversified industry’s rise of 4.4%. Image Source: Zacks Investment ResearchLet’s find out why EMN stock is worth retaining at the moment.Eastman Chemical Gains on Cost Actions & InnovationEastman is gaining from its actions to manage costs. It is expected to benefit from lower operating costs from its operational transformation program in 2024.EMN is taking action to keep its manufacturing and administrative costs in control. It achieved cost savings of around $200 million in 2023, net of inflation.  Pricing initiatives and lower raw material and energy costs are also expected to support the company’s bottom line. The company plans to maintain pricing discipline and improve asset utilization throughout 2024.Eastman aims to increase new business revenues by utilizing its innovation-driven growth strategy. Innovation and market development initiatives are expected to support its sales volumes. Its specialty portfolio is expected to drive sales growth across key end markets such as consumer durables, building & construction and transportation.The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. It anticipates a $20-$30 million of incremental EBITDA contribution from the Kingsport facility on a year-over-year basis.Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation with an emphasis on debt reduction. It returned $526 million to shareholders in 2023 through dividends and share repurchases. It also raised its dividend for the 14th consecutive year. EMN expects to repurchase shares worth around $300 million in 2024. It expects to deliver around $1.3 billion in operating cash flow in 2024.Demand Weakness a Concern for EMN StockEMN is exposed to headwinds from weak demand in certain markets. It is seeing soft demand in building & construction and cautious customer behavior in consumer durables and electronics. Demand in building & construction remains sluggish in most regions. While Eastman Chemical is seeing an end of customer inventory de-stocking across most of its end markets, the same is expected to continue in medical applications over the near term. Weaker demand is expected to adversely impact its performance in the fourth quarter of 2024.Eastman Chemical Company Price and Consensus Eastman Chemical Company price-consensus-chart | Eastman Chemical Company QuoteEMN’s Zacks Rank & Other Key PicksEMN currently carries a Zacks Rank #3 (Hold).Better-ranked stocks in the Basic Materials space are Methanex Corporation MEOH, Axalta Coating Systems Ltd. AXTA and Ingevity Corporation NGVT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Methanex’s current-year earnings has increased by 20.7% in the past 60 days. MEOH beat the consensus estimate in each of the last four quarters with the average surprise being 101%. Its shares have gained roughly 11% in the past year.The Zacks Consensus Estimate for Axalta Coating’s current year earnings is pegged at $2.15, indicating a rise of 36.9% from year-ago levels. The Zacks Consensus Estimate for AXTA’s current year earnings has increased 3.9% in the past 60 days. The stock has rallied around 26% in the past year. Ingevity beat the consensus estimate in three of the last four quarters while missed once. In this timeframe, it delivered an earnings surprise of 95.4%, on average. NGVT’s shares have gained roughly 24% in the past year. Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Methanex Corporation (MEOH): Free Stock Analysis Report Eastman Chemical Company (EMN): Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA): Free Stock Analysis Report Ingevity Corporation (NGVT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks