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Eastman Chemical (EMN) Raises Global Cellulosic Yarn Prices

Eastman Chemical Company EMN is raising global prices of cellulosic yarn by 35 cents per kg. The price hike is effective Jan 1, 2019.

Eastman Chemical is taking actions to raise selling prices of products in the wake of raw material price inflation. The company also recently announced price hikes for Esters, Anhydrides and Glycol Ethers Esters prices in North and Latin America.

Higher selling prices of most product lines contributed to revenue growth at the company’s Additives & Functional Products and Chemical Intermediates segments in the third quarter of 2018.

In a year’s time, shares of Eastman Chemical have outperformed the industry it belongs to. The stock has lost 22% compared with the industry’s fall of 24.2%.



During the third-quarter earnings call, Eastman Chemical noted that strong volume gains in the specialty businesses, disciplined cost management and a lower effective tax rate helped it achieve year-over-year adjusted earnings per share growth of 13% during the first nine months of 2018. The company continues to expect year-over-year adjusted earnings per share growth of 10-14% for 2018. The company also expects to generate roughly $1.1 billion of free cash flow in 2018.

The company is focused on productivity and cost-cutting actions, which are helping it offset raw material cost inflation and other cost headwinds. In 2018, Eastman Chemical expects to deliver $100 million of savings under its cost-reduction program.

Eastman Chemical has been seeing a rise in raw materials costs, mostly in its chemical intermediates business, as witnessed in the third quarter. Raw materials cost headwind is expected to persist through the remainder of 2018. Nevertheless, the company’s productivity and price hike actions are likely to help it offset the input cost pressure.

Eastman Chemical Company Price and Consensus

 

Eastman Chemical Company Price and Consensus | Eastman Chemical Company Quote

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space are The Mosaic Company MOS, Nexeo Solutions, Inc. NXEO and BHP Billiton PLC BBL.

Mosaic has an expected long-term earnings growth rate of 7% and a Zacks Rank #1 (Strong Buy). The company’s shares have rallied 33.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nexeo has an expected long-term earnings growth rate of 30.6% and a Zacks Rank #1. The company’s shares have gained 3.4% in the past year.

BHP Billiton has an expected long-term earnings growth rate of 5.3% and a Zacks Rank #2 (Buy). The company’s shares have gained 5.9% over the past year.

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