Bear of the Day: Eastman Chemical (EMN)

Eastman Chemical Co. EMN is experiencing a challenging global macroenvironment as it also deals with tariffs. This Zacks Rank #5 (Strong Sell) is expected to see earnings decline 22% this year.

Eastman is a global specialty materials company. Founded in 1920, it serves customers in the transportation, building and construction and consumables industries, in more than 100 countries.

It’s a mid-cap company with a market cap of $7.9 billion.

Eastman Misses on Earnings in the Second Quarter of 2025

On July 31, 2025, Eastman reported second quarter 2025 earnings and missed on the Zacks Consensus by $0.12. Earnings were $1.60 versus the consensus of $1.72.

Revenue fell to $2.29 billion from $2.36 billion a year ago.

Net cash provided by operating activities fell to $233 million compared to last year at $367 million.

“As expected, the macroeconomic backdrop showed little signs of seasonal improvements across our end markets,” said Mark Costa, CEO.

“In this context, we worked hard to mitigate tariff impacts on our global business through supply chain and commercial excellence,” he added.

Eastman Guides Below Consensus for the Third Quarter

Eastman is only giving guidance on earnings for the quarter ahead, not for the full year. It guided under consensus for the third quarter at $1.25.

Given all the challenges it is facing, including a changing tariff landscape, it’s not surprising that it is raising cash.

It expects to generate full-year operating cash flow of about $1 billion.

The quarterly dividend remains unchanged at $0.83 per share. It is yielding 4.9%.

Analysts Cut Third Quarter and Full Year Earnings Estimates

Eastman’s second quarter press release was bearish. It described how this is the fourth year of these challenging industry conditions.

It’s not surprising that the analysts are bearish too.

4 estimates were cut for the third quarter, pushing the Zacks Consensus down to $1.33 from $1.83. This is slightly above the guidance of $1.25.

5 estimates were also cut for 2025 in the last 30 days. That has pushed the Zacks Consensus down to $6.16 from $7.18. That’s an earnings decline of 21.9% as Eastman made $7.89 last year.

They are also bearish on 2026. 5 estimates were cut in the last month as well. The Zacks Consensus has fallen to $7.17 from $8.05 during that time.

A company will get the Zacks #5 (Strong Sell) when the analysts are cutting their earnings estimates.

You can see the weakness in earnings in the price and consensus chart.

Eastman: Value or Trap?

Shares of Eastman have been falling in the last year.

But is it a value?

Eastman now trades with a forward price-to-earnings (P/E) of just 11.1. But with earnings on the decline, and the industry still under pressure, it has more trap characteristics.

Stock investors interested in Eastman should keep watch for a turnaround in the earnings.

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This article originally published on Zacks Investment Research (zacks.com).

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