Eastman Chemical (EMN) Could be Buying Opportunity on Lower Oil Prices, Diversified Income - Barron's

Eastman Chemical (NYSE: EMN) is trading positive Monday following a positive mention in Barron's over the weekend.

Barron's sees Eastman shares gaining 35 percent over the next year following a 22 percent drop over the past 12 months.

The drop in oil prices could be one factor; while Eastman will see oil-based products cheaper to make, the company's cellulose-based products won't see much change. Where Eastman uses coal and gas feedstocks might see a challenge from overseas producers. Barron's noted, But, shifts in feedstock costs mainly affect pricing of commodified rather than branded products, and Eastman has been shifting its offering toward the latter.

Earnings for 2015 are expected to slightly slip to $7.03, versus $7.07 reported for 2014.

At $68, Eastman shares trade for just under 10 times forward earnings, which is lower than the S&P average and the 12 times earnings Eastman traded at before the recent oil plunge.

Eastman is focusing more on durable global trends, like middle class growth, the need for more robust crop yields, and a push for more energy efficiency.

With EMN expected to grow EPS by 9 percent to $7.68 next year, investors might do well to jump in during the current growth pause.

You May Also Be Interested In

• Meta Platforms, IBM, Caterpillar fall premarket; American Airlines, Chipotle rise
• HarborOne Bancorp, Inc. (HONE) Tops Q1 EPS by 6c
• Analysts questions why you would buy Meta Platforms (META) stock