Eastman Chemical (EMN) Stock Forecast & Price Target

Eastman Chemical has strategically shifted its focus toward higher-margin specialty businesses, which now account for approximately 70% of its total offerings, thereby enhancing its earnings consistency. The company's potential for earnings upside is further supported by anticipated improvements in pricing and mix within its specialty segments, particularly in Additives and Functional Products and Advanced Materials. Additionally, with a growing presence in international markets, especially in Asia, and a favorable sentiment towards macroeconomic conditions, Eastman is well-positioned for future growth and profitability.

Eastman Chemical has successfully reduced its commodity exposure from approximately 17% in 2010 to around 13% currently by focusing on higher-margin specialty products; however, the company still trades at a low multiple compared to its peers. The recent guidance for lower EBIT in Q3, despite a decent performance in Q2, indicates ongoing operational challenges that could hinder future growth. Furthermore, the identification of pull-forward in Tow demand in Europe suggests that the company may be facing a weakened demand environment, further contributing to a negative outlook on its financial performance.