JP Morgan analyst Jeffrey J. Zekauskas downgraded the ranking for Eastman Chemical Firm (NYSE:EMN) from Obese to Impartial and lower the value forecast from $112.00 to $76.00.
On April 25, the corporate reported first-quarter adjusted EPS of $1.91, beating the $1.89 estimate, whereas gross sales of $2.29 billion missed the $2.33 billion estimate.
For the second quarter, Eastman anticipates adjusted EPS of $1.70-$1.90, beneath the consensus estimate of $2.18.
The corporate expects a slight sequential quantity improve throughout its markets within the second quarter, however it’s lower than typical on account of commerce uncertainty.
Moreover, second-quarter earnings are anticipated to be negatively impacted by U.S.-China tariffs and elevated deliberate upkeep.
The analyst remarks that sometimes, Eastman sees a second-quarter quantity and earnings improve on account of seasonal building.
Zekauskas writes that tariffs haven’t instantly impacted Eastman’s operations as a result of prospects are at present utilizing materials already throughout the nation.
Additional, the analyst says that sustained tough commerce situations might improve near-term earnings threat and diminish longer-term progress prospects.
The analyst estimates the corporate’s specialty polymer gross sales to China to be ~$340 million, producing ~$100 million in EBITDA.
Whereas Eastman forecasts $1.2 billion in 2025 money stream from operations, this can be aggressive given the $167 million money use within the first quarter, provides the analyst.
Consequently, the analyst lowered the EPS estimate to $7.40 (from $8.45) for 2025 and $7.80 (from $9.00) for 2026.
Contemplating present situations, an extra ~$1.00/share discount to the bottom case 2025 earnings vary ($7.00-$7.75) appears acceptable, provides the analyst.
Zekauskas provides that this might doubtlessly mirror much less stress on the second half of 2025 filter tow earnings as destocking results ease.
Value Motion: EMN shares are down 0.84% at 475.20 on the final verify Monday.
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This text JP Morgan Cautions Commerce Tensions Are Weighing On Eastman Chemical Development Prospects initially appeared on Benzinga.com
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