Bear of the Day: Eastman Chemical (EMN)

Core Viewpoint - Eastman Chemical Co. is facing a challenging global macroenvironment and is expected to see a significant earnings decline of 22% this year, with a Zacks Rank of 5 (Strong Sell) [1] Financial Performance - In Q2 2025, Eastman reported earnings of $1.60, missing the Zacks Consensus by $0.12, which was $1.72 [2] - Revenue decreased to $2.29 billion from $2.36 billion year-over-year [2] - Net cash provided by operating activities fell to $233 million compared to $367 million last year [2] Guidance and Estimates - Eastman provided guidance for Q3 earnings at $1.25, which is below the consensus estimate of $1.33 [4][5] - Analysts have cut estimates for Q3, reducing the Zacks Consensus from $1.83 to $1.33 [5] - For the full year 2025, estimates have been cut from $7.18 to $6.16, indicating a 21.9% decline from last year's earnings of $7.89 [6] Market Performance - Eastman shares have fallen 32% over the past year, raising questions about whether it represents a value opportunity or a potential trap [7][9] - The company currently trades with a forward price-to-earnings (P/E) ratio of 11.1, but declining earnings and ongoing industry pressures suggest it may have trap characteristics [13]