EMN
Eastman Chemical Co.
Industrial/Transportation
06/13/2013
Presented
| Date | 06/12/2013 |
| Price | $69.40 |
| Market Cap | $10.80B |
| Ent Value | $15.45B |
| P/E Ratio | 14.63x |
| Book Value | $23.61 |
| Div Yield | 2.2% |
| Shares O/S | 0.00M |
| Ave Daily Vol | 1,640,000 |
| Short Int | 1.05% |
Current
| Price | $110.32 |
| Market Cap | $12.89B |
| Eastman Chemical Company, a specialty chemical company, engages in the manufacture and sale of chemicals, plastics, and fibers in the United States and internationally. The company’s Additives & Functional Products segment offers solvents that include specialty coalescents and ketones, esters, glycol ethers, and alcohol solvents; and cellulose and polyester-based specialty polymers that are used in coatings, consumables, health and wellness, electronics, and industrial chemicals. It also provides insoluble sulfur products; antidegradant products; and performance resins and cellulosic products for the tires industry. Its Adhesives & Plasticizers segment manufactures resins and plasticizers, which are used in the consumables, building and construction, durable goods, health and wellness, and industrial chemicals and processing markets. The company’s Advanced Materials segment produces and markets specialty copolyesters, cellulose esters, interlayers, and aftermarket window film products that are used in transportation, consumables, building and construction, durable goods, health and wellness, and electronics sectors. Its Fibers segment offers Estron acetate tow and Estrobond triacetin plasticizers for use in the manufacture of cigarette filters; Estron natural and Chromspun solutions dyed acetate yarns for use in apparel, home furnishings, and industrial fabrics; and cellulose acetate flake and acetyl raw materials for other acetate fiber producers. This segments product includes acetate tow, acetate yarn, and acetyl chemical products. The company’s Specialty Fluids & Intermediates segment provides specialty fluids, acetyl products, and olefin derivatives that are used in industrial chemicals and processing; building and construction; health and wellness; energy, fuels, and water; consumables; and agriculture markets. The company was founded in 1920 and is headquartered in Kingsport, Tennessee. |
Highlights
The presenter believes investors may be able to take advantage of a structural shift and event-driven situation by owning shares of EMN at present levels (~10x the consensus 2013 EPS estimate). He highlighted the company’s effort to transition to a predominantly specialty chemicals-focused company (from a commodity player, tied to the volatile swings in oil and gas prices), and how an expansion of the P/E multiple to 12x is likely. He laid out his thesis as follows:
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