Here's Why You Should Retain Eastman Chemical Stock in Your Portfolio

Core Viewpoint - Eastman Chemical Company (EMN) is experiencing growth driven by innovation and cost management despite facing demand weaknesses in certain markets [1][3]. Group 1: Innovation and Growth Strategy - Eastman is focusing on increasing new business revenues through an innovation-driven growth strategy, which is expected to enhance sales volumes [3]. - The company's specialty portfolio is projected to drive sales growth in key end markets such as consumer durables, building & construction, and transportation [3]. Group 2: Financial Performance and Cost Management - The Kingsport methanolysis facility is anticipated to contribute an incremental EBITDA of $20-$30 million year-over-year in 2024 [4]. - Eastman achieved cost savings of approximately $200 million in 2023, net of inflation, and is expected to benefit from lower operating costs due to its operational transformation program in 2024 [5]. - The company plans to maintain pricing discipline and improve asset utilization throughout 2024 [5]. Group 3: Capital Allocation and Shareholder Returns - Eastman is committed to disciplined capital allocation with a focus on debt reduction, returning$526 million to shareholders in 2023 through dividends and share repurchases [6]. - The company raised its dividend for the 14th consecutive year and plans to repurchase shares worth around $300 million in 2024 [7]. - EMN expects to generate approximately$1.3 billion in operating cash flow in 2024 [7]. Group 4: Demand Challenges - Eastman is facing challenges from weak demand in specific markets, particularly in building & construction and cautious customer behavior in consumer durables and electronics [8]. - The company anticipates continued weak demand in medical applications, which may adversely affect performance in the fourth quarter of 2024 [9].