Tuesday, Jefferies adjusted its price target on shares of Eastman Chemical (NYSE:EMN), increasing it to $102 from the previous $91, while maintaining a Hold rating. The firm noted that the period of inventory destocking appears to have concluded, although there are minimal indications of a forthcoming restocking cycle. The expectation is that the overall market conditions will remain relatively unchanged throughout 2024.
The company faced challenges in the first quarter due to Chemical Intermediate spreads, which were identified as a headwind. However, there has been a noticeable improvement in March. This positive shift has contributed to the firm's decision to revise the price target upward.
Eastman Chemical's Kingsport methanolysis facility is reportedly progressing as planned and is anticipated to contribute an additional $75 million in incremental EBITDA for the year 2024. This development has been a factor in the firm's assessment of the company's financial outlook.
Furthermore, Eastman Chemical has received a grant from the Department of Energy (DOE) to support the construction of a second methanolysis facility in Texas. The grant is seen as a vote of confidence in the company's sustainable technology and its potential to enhance the company's future financial performance.
The updated price target reflects the firm's evaluation of Eastman Chemical's current operational progress and its potential to generate increased earnings, despite the broader market's expected steady state.
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