Eastman Chemical (EMN) PT Raised to $118 at Deutsche Bank; 'Share Price Decline Unwarranted'
Deutsche Bank raised its price target on Eastman Chemical (NYSE: EMN) to $118.00 (from $115.00) while maintaining a Buy rating.
Analyst David Begleiter commented, "Solid Q1 beat and raise. Valuation an un-specialty like 12.2x '18E EPS. Buy. Eastman shares fell 1.2% (S&P: +0.1%) following its Q1 release as a solid beat (by $0.14, or 7%) and raise (by 2% at the midpoint to up 10-14% YoY) was overshadowed by a change in revenue recognition, which while having no impact on the full year, did pull forward $0.10 of earnings into Q1 from 2H’18. We believe the share price decline was unwarranted as i) even adjusting for the $0.10, Q1 still beat by $0.04, or 2% and ii) the increase in ’18 EPS guidance was driven by the high multiple specialty businesses (70% of ‘18E EBITDA). With Eastman’s innovation driven growth model continuing to gain traction and valuation still an un- specialty like 12.2x ‘18E EPS and an 8% FCF yield, Buy."