On Tuesday, Piper Sandler adjusted its price target for Eastman Chemical (NYSE:NYSE:EMN) shares, increasing it to $105.00 from the previous $90.00, while the firm continues to hold a Neutral stance on the stock. The revision follows Eastman Chemical's release of first-quarter 2024 results and updated guidance for the upcoming year.
The firm's decision to raise the target price was influenced by Eastman Chemical's first-quarter earnings, which surpassed expectations, and a generally more positive outlook for the industry and the markets that Eastman Chemical serves. In response to these factors, Piper Sandler has also modestly increased its EBITDA forecasts for 2024 and 2025.
The new valuation is based on a projected 2025 enterprise value to EBITDA (EV/EBITDA) multiple of 8.7 times, an increase from the previous multiple of 8.0 times. This adjustment aligns with Piper Sandler's revised expectations for Eastman Chemical's midcycle earnings levels by 2025.
Eastman Chemical's recent performance and the updated financial outlook have prompted Piper Sandler to reassess the company's value, resulting in the adjusted price target and EBITDA estimates. The firm's neutral rating, however, remains unchanged as the updated valuation has been set.
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