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Eastman Chemical (EMN) Announces Buyback Worth $500 Million

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Eastman Chemical Company EMN recently entered into an accelerated share repurchase (ASR) agreement with Barclays Bank PLC and Royal Bank of Canada to buyback $500 million of its common stock. The repurchase is in addition to earlier planned buybacks. The company is now targeting $1 billion of repurchases in 2021.

The company’s board also increased its share repurchase authorization by $2.5 billion. The ASR buyback will be under the February 2018 $2 billion Board share buyback authorization. Upon completion of the ASR, the company will have authorization to buyback another roughly $2.85 billion of shares.

The company projects roughly 80% of the share repurchases or 3.7 million shares under the ASR agreement on Dec 8, 2021, based on its closing price of $109.34 on Dec 6, 2021.

The ASR buybacks are forecast to be completed in the first quarter of 2022, with the total number of repurchased shares based on Eastman’s volume-weighted average price during the term of the agreement, minus a discount.

The share buyback under the authorization is expected to be implemented through purchases made from time to time in either or both open market and private transactions.

Eastman Chemical’s shares have increased 13.6% in the past year compared with a 15.4% rise of the industry.

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Eastman Chemical, in its last earnings call, stated that it is seeing sustained logistics challenges, supply-chain issues and higher raw material and energy costs as it enters the fourth quarter. It is hiking prices across its specialty product lines to offset higher costs.

It expects adjusted earnings per share of $8.80-$9.00 for 2021. It also anticipates free cash flow to reach $1.1 billion for the year.

Zacks Rank & Key Picks

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Celanese Corporation CE, The Chemours Company CC and Nucor Corporation NUE.

Celanese has an expected earnings growth rate of 139.5% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 8.7% upward in the past 60 days.

Celanese beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 12.7%, on average. The stock has surged around 22% in a year. CE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for the current year has been revised 10% upward in the past 60 days.

Chemours beat the Zacks Consensus Estimate for earnings in all of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 34.2%, on average. CC has increased around 20.8% over a year. CC currently sports a Zacks Rank #2.

Nucor has a projected earnings growth rate of 583.2% for the current year. The consensus estimate for the current year has been revised 7.2% upward in the past 60 days.

Nucor beat the Zacks Consensus Estimate for earnings in two of the last four quarters. NUE has a trailing four-quarter earnings surprise of 2.74%, on average. The company’s shares have gained around 97.5% in a year. It currently carries a Zacks Rank #2.


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Eastman Chemical Company (EMN) : Free Stock Analysis Report

Celanese Corporation (CE) : Free Stock Analysis Report

The Chemours Company (CC) : Free Stock Analysis Report

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