Eastman Chemical Company (NYSE:EMN) — Eastman Chemical is a global manufacturer of chemicals, fibers and plastics used in various consumer and industrial products. It is the world’s largest manufacturer of high-performance window tints used in automobiles, homes and commercial buildings. On Feb. 24, EMN stock launched an aggressive consumer marketing campaign to capture a growing consumer demand for its LLumar protective tint product in North America.
The new film has an advancement called Hydrogard that increases the durability of glass against impacts, water, oil and stains of various kinds. S&P is so impressed with the potential for this product and the management’s ability to market it that, with the benefit of an expected pickup in U.S. infrastructure spending, they recently added this “five-star strong buy” company to its “Platinum Model Portfolio” list of stocks. This list is a combination of the top-ranked stocks from their Fair Value quantitative system with their qualitative stock selection list (STARS).
In other words, their Platinum List is considered as the “best of the best” list of high-performance stocks.
Standard & Poor’s estimates earnings per share of $7.31 for 2017, up 8.1% from $6.76 in 2016, and they forecast EPS of $7.94 in 2018. As of yesterday’s close EMN stock is selling at 10.6X S&P’s EPS est. for 2017, a 25% discount to its peers. Their one-year price target for Eastman is $94. The stock pays a dividend of $2.04 for a dividend yield of 2.6% on my suggested buy price of $76.
Technically, following a decline from its April 2016 high at $76.21, EMN fell to $64 in October. But volume demand drove the stock to a new high at over $82 on March 1. Since the new high, profit-taking resulted in a fall to the support zone at $75 to $78 where I believe that it is a good value. Stocks are currently under selling pressure due to the likely increase in interest rates, therefore traders should try to purchase EMN at $76 for a trade to $90. This stock is also a candidate for investors seeking long-term growth in the diversified chemicals sector.
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