Eastman Chemical Q1 profit beats estimates on improved volumes, price increases

Overview

• U.S. specialty materials maker's Q1 revenue fell 5% yr/yr, slightly beating analyst expectations

• Adjusted EPS for Q1 beat consensus, aided by cost savings and improved specialty volumes

• Company raised prices by ~$500 mln across portfolio to offset inflation

Outlook

• Eastman projects Q2 2026 adjusted EPS between $1.70 and $1.90

• Company expects stable demand in consumer discretionary markets, except automotive, which will decline

• Eastman aims to reduce costs by $125 mln to $150 mln, net of inflation, in 2026

Result Drivers

• SPECIALTY VOLUME IMPROVEMENT - Sequential sales volume/mix in specialty businesses rose over 10% as demand improved and customer inventory caution eased

• INVENTORY DESTOCKING & WEAK DEMAND - Year-over-year revenue decline driven by customer inventory destocking in acetate tow and continued weak demand in consumer discretionary end markets

• PRICE INCREASES TO OFFSET INFLATION - Co implemented ~$500 mln of price increases across portfolio to address substantial raw material and distribution inflation

Company press release: ID:nBw2J39xPa

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the specialty chemicals peer group is "buy"

• Wall Street's median 12-month price target for Eastman Chemical Co is $78.50, about 11.5% above its April 29 closing price of $70.42

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

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