Reasons Why You Should Hold Eastman Chemical Stock in Your Portfolio

Core Viewpoint - Eastman Chemical Company is positioned to benefit from innovation and cost-cutting measures despite facing demand weakness in certain markets [1][2]. Group 1: Company Performance - EMN stock has decreased by 10.7% over the past six months, slightly better than the Zacks Chemicals Diversified industry's decline of 11.3% [2]. - The company anticipates an incremental EBITDA contribution of $20-$30 million from its Kingsport methanolysis facility for the full year 2024 [5]. - Eastman Chemical is expected to generate around 1.3 billion in operating cash flow for the full year 2024 [8]. Group 2: Innovation and Growth Strategy - Eastman aims to boost new business revenues through an innovation-driven growth strategy, focusing on sales growth in key end markets such as consumer durables, building & construction, and transportation [4]. - The company is implementing operational transformation programs to manage costs effectively, including maintaining pricing discipline and improving asset utilization [7]. Group 3: Dividend and Capital Allocation - Eastman Chemical has increased its quarterly cash dividend to 83 cents per share, marking the 15th consecutive year of dividend hikes, reflecting confidence in steady earnings and strong cash flow [8]. - The company plans to repurchase shares worth approximately 300 million in 2024 [8]. Group 4: Market Challenges - Eastman Chemical is experiencing weak demand in specific markets, particularly in building & construction and consumer durables, with sluggish demand noted across most regions [9]. - The company expects continued inventory de-stocking in medical applications, which may adversely affect performance in the fourth quarter of 2024 [10].