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Eastman Chemical (EMN) Wraps Up Sale of Texas City Operations

Eastman Chemical Company EMN has stated that the previously announced sale of its Texas City Operations to INEOS Acetyls has been completed. The company’s Intermediates section originally included Texas City Operations. It has retained ownership of its plasticizer business at the facility, which INEOS now operates on behalf of Eastman under the terms of this arrangement. Eastman will also keep producing acetyls at its Tennessee Operations in Kingsport.

The total sale price of $490 million includes around $415 million in cash at closing and the remainder in equal installments on the first and second anniversaries of the transaction completion. Working capital and other customary post-closing adjustments affect the final purchase price. The proceeds of the divestiture are expected to be used for debt repayment in the near future.

Shares of Eastman Chemical have lost 0.7% over the past year compared with a 12.7% decline of its industry.

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The company, on its third-quarter call, stated that it is seeing muted demand heading into the fourth quarter as customers are cautious in the prevailing challenging environment. In addition, it anticipates regular seasonality in key end markets, including building and construction, consumer durables and performance films for automotive applications. It expects EPS for 2023 to be between $6.30 and $6.50. Furthermore, EMN expects to deliver $1.4 billion in operating cash flow in 2023.

Eastman Chemical Company Price and Consensus

Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote

Zacks Rank & Key Picks

EMN currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.

Denison Mines has a projected earnings growth rate of 100% for the current year. It currently carries a Zacks Rank #1 (Strong Buy).  DNN delivered a trailing four-quarter earnings surprise of roughly 225%, on average. The stock is up around 60.7% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #1.  AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 20.8% in a year.

Andersons currently carries a Zacks Rank #2 (Buy). The stock has gained roughly 45% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.

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