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Eastman (EMN) Inks Deal to Boost P&G's Plastic Packaging

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  • EMN
  • PG
  • LYB
  • APEMY

Eastman Chemical Company EMN recently made an agreement with Procter & Gamble (“P&G”) to boost the plastic packaging transformation and collaborate on recycling solutions to bring in more circularity.

Per the terms of the agreement, P&G will use Eastman Renew materials in some of its products and packaging, and in turn support the joint goals of reducing the use of virgin plastic from fossil resources. Also, the companies will work toward initiatives to advocate the need to reduce dependency on virgin plastic and ensure circularity for many daily-use products. Eastman Renew materials divert plastics from landfills, providing them with an extended useful life.

Other than enhancing packaging, the two companies will be collaborating on initiatives to work on infrastructure needed to boost plastic recycling rates. The expanded recycling streams will be further used to create new materials via Eastman’s molecular recycling technologies.

Eastman is enthusiastic about the partnership and hopes to give a new meaning to waste by creating value from it and contribute toward solving the plastic waste crisis.

P&G noted that by using Eastman’s molecular recycling technologies it can take a conscious approach to eliminate environmental plastic waste.

Shares of Eastman have grown 55.5% in a year compared with the industry’s rise of 31.1%. The estimated earnings growth rate for the company for the current year is pegged at 50.1%.

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In the second quarter, the company recorded adjusted earnings of $2.46 per share, which increased from 85 cents in the year-ago quarter, and topped the Zacks Consensus Estimate of $2.32. Revenues rose 38% year over year to $2,653 million in the quarter. The figure also surpassed the Zacks Consensus Estimate of $2,398.8 million.

Eastman said that it is seeing continued momentum as it gains from innovation, strong end-market recovery and cost discipline from its operations transformation program. It expects adjusted earnings per share of $8.8-$9.2 for 2021. It also anticipates free cash flow to exceed $1.1 billion for the year, which would be the fifth consecutive year of a free cash flow above $1 billion.

Eastman Chemical Company Price and Consensus

Eastman Chemical Company Price and Consensus
Eastman Chemical Company Price and Consensus

Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote

Zacks Rank & Other Stocks to Consider

Currently, Eastman carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the basic materials space include LyondellBasell Industries N.V. LYB, Avient Corporation AVNT and Aperam APEMY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LyondellBasell has a projected earnings growth rate of 222.6% for the current year. The company’s shares have risen 42% over the past year.

Avient has a projected earnings growth rate of 65.3% for the current year. The company’s shares have surged 78.1% over the past year.

Aperam has a projected earnings growth rate of 429.8% for the current year. The company’s shares have grown 97.3% over the past year.


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Eastman Chemical Company (EMN) : Free Stock Analysis Report

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