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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Eastman Chemical Company (XNYS:EMN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
EMN
Name:
EASTMAN CHEMICAL COMPANY (XNYS:EMN)
Sector:
- 98000.00K
Industry:
Chemicals
CEO:
Mr. Mark Costa
Total Employees:
14,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 385.61% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF EASTMAN CHEMICAL COMPANY(EMN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CHEMICALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
89.52
One Month Price Target:
$90.24
Six Month Price Target :
$93.86
Likely Price in One Year's Time:
Ticker:
$98.19
Likely Trading Range Today Under (Normal Volatility)
$89.19
Price Upper limit ($) :
$89.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$85.06
This week:
$79.55
This month :
$69.58
Other Primary facts
Market Cap:
11.01B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
122.81M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.03%
-13.6%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$110.20
$100.70
$68.84
$78.34
Medium risk (<10%) entry points
Buy Call
Sell Call
$97.60
Buy Put:
Sell Put:
$95.57
$81.41
$83.47
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
EMN
Sharpe Ratio:
1.77%
Comparison:
EMN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 46.86% higher than the industry
& is -22.49% lower than the market/S&P 500 average
Average Returns/Yield of
EMN
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.04%
Yearly returns:
10.16%
Comparison of returns:
Average annual returns/yield (last 3 years) is 23.20% above industry average
Classification:
EMN, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.78
Statistical test of Returns:
EMN has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.45%
Weekly Volatility:
5.48%
Monthly Volatility:
10.96%
Yearly Volatility:
37.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.85%
Volatility in last five trading days has been -65.12% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.98%
Weekly VaR:
-11.14%
Monthly VaR:
-22.27%
How Much Can the price of
EMN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-77.15%
This translates to price declining to:
$72.42
This translates to price declining to:
$20.46
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
EMN is a 57.19% riskier investment compared to the market/S&P 500 & is 34.66% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.86% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
EMN
Beta in relation to market/S&P 500--1.44
Expected beta in 1 year's time:
1.12
Expected beta in 3 year's time:
1.584
Unlevered (debt free) Beta:
0.903
Beta in relation to Nasdaq (XNAS):
0.754
Beta in relation to all global stocks::
0.751
Beta Comparison & Analysis
Beta of competitors/peers::
1.049
Beta is 37.48% higher than peers
Average Industry Beta:
1.371
Beta is 5.21% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
7.93%
Sustainable growth rate is -57.54% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.005
Alpha is -78.41% below industry average alpha yield
Alpha is -33% below the market average
Analysis of Cost of Capital of
EMN
Equity cost of capital:
0.130
Equity cost of capital is 3.90% above industry mean WACC
Unlevered (without debt) cost of capital:
8.16%
Before-tax cost of debt:
3.65%
After-tax cost of debt:
2.89%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.89%
WACC is -0.21% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$87.79
Revenue growth rate per share of (3Y):
1.84
Annual revenue growth rate is 82.54% above the industry average
EPS:
$6.07
Expected Annual growth rate of EPS (3Y):
4.23%
Expected future EPS growth rate is -80.14% lower than the Chemicals industry
Free cash flow (FCF) per share:
$6.44
Balance sheet equity growth per share: 25.67%
Equity growth rate per share is 725.25% higher than the industry
Debt per share
$35.66
EBITDA per share
$14.07
Valuation Analysis Today of
EMN
P/E Ratio:
9.76
P/E Ratio of Competitors/Peers:
9.39
P/E ratio is 3.89% higher than main peers & is -18.71% lower than the industry
Stock price/value with industry average P/E ratio: $72.87
EMN is 22.85% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $34.56
Present value of the expected future dividends only: $26.08
P/S (Price to Sales ratio):
1.02
Price to sales ratio is -14.49% below the industry mean
P/B (Price to book value ratio):
1.84
Price to free cash flow: 13.90
Price to free cash flow ratio is -12.41% lower than the industry
Net income growth rate (3Y):
-15.44%
Net income growth rate is -116.71% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.98%
Dividend yeild: 3.32%
Previous Dividend: $0.76
Previous adjusted dividend: $0.76
Previous Dividend: $2.97
Expected next dividend best case: $0.79
Expected next dividend worst case: $0.73
Average dividend payment (long-term): $0.70
Average dividend increase/decrease (growth rate) % per period: 1.47%
Expected next dividend payment date: 10/06/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/08/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.76
2021-12-14--$0.76
2021-06-14--$0.69
2022-03-14--$0.76
2021-09-14--$0.69
2021-03-12--$0.69
Dividend growth rate is -64.95% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
74.31%
Net debt to equity ratio:
82.74%
Debt to assets ratio:
27.70%
Net debt to assets ratio:
30.85%
Debt-to-asset ratio is -55.71% below industry average
Ability to repay debt:
Interest coverage ratio:
8.82
Interest coverage ratio is -31.32% less than industry average
Looking forward:
Debt growth rate:
-21.47%
Annual debt growth is -120% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.703
Statistical significance of correlation:
EMN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.682
Stock price is 3.16% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.682
Correlation of price movement with Nasdaq (^IXIC):
0.007
Covariance of price movement with the market:
0.009
Kurtosis
5.54
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.468
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
EMN
Gross Profit Margin Ratio:
91%
Operating Profit Margin Ratio:
12.84%
Operating profit margin is 31.66% higher than the industry
Net Profit Margin Ratio:
91%
Effective Tax Rate:
19.81%
Effective tax rate is 5.10% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.88%
Return on equity (ROE) is -43.71% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.18%
Return on assets (ROA) is -35.33% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.57
Current ratio is -6.12% below industry average
Cash Conversion Cycle (days):
55
Cash conversion cycle is 45.67% above industry average
The remaining useful life of property plant & equipment is: 9.1 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
770.1K
Each employee generates -31% less revenue than industry average revenue per employee
EBITDA generated per employee:
123.4K
Each employee generates -44% less EBITDA than industry average revenue per employee
Profit generated per employee:
58.4K
Each employee generates -57% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.0K
Each employee generates 932% more free cash flow than industry average revenue per employee
Assets/Capital per employee
776.9K
Each employee generates 932% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 12.39%
Growth rate in R&D investment/expenditure is 298.34% higher than the industry
Competitors/Peer firms of
EMN
JAMES HARDIE INDUSTRIES PUBLIC LIMITED COMPANY (XNYS:JHX)
Teck Resources Limited (XNYS:TECK)
Wheaton Precious Metals Corp. (XNYS:WPM)
THE MOSAIC COMPANY (XNYS:MOS)
CF INDUSTRIES HOLDINGS, INC. (XNYS:CF)
Aluminum Corporation of China Limited (XNYS:ACH)
AVTR-PA
Sociedad Quimica y Minera de Chile SA (XNYS:SQM)
Suzano Inc. (XNYS:SUZ)
Current Analyst Ratings
Strong buy�8%
Buy�38%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.78B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
8.33B
2.45B
261.00M
-
807.00M
-
-
1.07B
2.00M
196.00M
510.00M
1.73B
1.38B
818.00M
1.03B
204.00M
818.00M
Statement of Cash Flow
Date:
Period:
121.00M
Differed Income Tax :
- 24000.00K
Stock Based Compensation :
-
Change in Working Capital :
- 102000.00K
Accounts Receivables:
- 127000.00K
Other Working Capital:
57.00M
Other Non-Cash Items:
- 214000.00K
Net Cash Provided by Operating Activities:
17.00M
Investments in PP&E:
- 112000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
487.00M
-
487.00M
1.65B
1.67B
1.12B
4.93B
5.00B
3.67B
1.30B
-
-
912.00M
10.88B
-
15.81B
1.38B
984.00M
117.00M
-
771.00M
3.14B
4.38B
1.52B
6.69B
-
9.83B
2.00M
8.69B
- 145000.0K
- 2658000.00K
March 31, 2022 at 6:00:00 AM
9.40B
5.89B
15.72B
-
5.36B
4.9B
-
- 5000.00K
- 117000.00K
-
-
-
- 98000.00K
227.00M
129.00M
- 1000.00K
28.00M
487.00M
459.00M
17.00M
- 115000.00K
- 98000.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
EMN
2023
2024
2025
2026
2027
$91.66
$100.54
$110.29
$120.97
$132.69