Eastman Chemical Company EMN is making waves in the circular economy realm, emerging as a frontrunner in sustainable innovation. The Department of Energy (“DOE”) has spotlighted Eastman by handpicking it as one of 33 enterprises set to engage in financial discussions to back the company’s upcoming molecular recycling hub in the United States.
It’s official – Eastman’s second molecular recycling endeavor in the United States has won DOE’s favor as the potential recipient of up to $375 million in funding sourced from the Bipartisan Infrastructure Law and Inflation Reduction Act. Post the DOE’s nod, Eastman has revealed plans to set up its second molecular recycling plant in Longview, TX.
The selection of Longview as the site was no coincidence. It was a thoughtfully crafted decision based on factors like symbiotic ties with existing infrastructure, operational efficiency, energy availability, spatial footprint, and access to plastic feedstock from the western and central U.S. regions. Furthermore, the location’s setup lends itself well to renewable energy integration. The hefty investment will fund the orchestration of activities aimed at readying mixed plastic waste for processing, deploying Eastman’s cutting-edge molecular recycling unit for depolymerizing waste, and constructing a polymer facility to yield virgin-quality materials for applications in packaging and textiles. In addition, the Longview recycling facility is anticipated to have the capacity to repurpose approximately 110,000 metric tons of discarded plastic that is hard to recycle.
This move is expected to create over 200 full-time, lucratively salaried jobs in the Longview area, in addition to around 1,000 temporary positions during the facility’s construction phase. Eastman’s presence in Longview runs deep, spanning more than seven decades, with a current workforce of over 1,500 individuals in the locality.
The DOE’s endorsement of EMN aims to fast-track the unveiling of groundbreaking recycled PET products through this novel initiative. An agreement inked with the DOE paves the way for broadening the project scope to encompass the development of thermal energy storage units and on-site solar energy production.
Over the past year, Eastman’s stock has surged by 18.8%, eclipsing its industry’s 7.1% downturn.
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During its fourth-quarter earnings call, EMN voiced optimism about an uptick in volume due to the absence of clients paring down inventory in most end markets, except for medical and agriculture segments – where inventory reductions will likely persist into the first quarter of 2024.
The company foresees modest growth in demand from several core industries, with discretionary markets holding steady. It envisions reaping benefits from the revenue and earnings stemming from its Kingsport methanolysis facility. In light of these factors, Eastman predicts its 2024 EPS to fall within the range of $7.25 to $8.00, with operating cash flow of roughly $1.4 billion.
Eastman Chemical Company Price and Consensus
Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote
Zacks Rank & Key Picks
Currently, Eastman holds a Zacks Rank #3 (Hold).
Some standout performers in the basic materials sector include Denison Mines Corp. DNN, Carpenter Technology Corporation CRS, and Hawkins, Inc. HWKN.
Denison Mines shines with a Zacks Rank #1 (Strong Buy). DNN has surpassed the Zacks Consensus Estimate for four consecutive quarters, boasting an average earnings surprise of 300%. The company’s shares have soared by 96.9% in the last year. For a glimpse of today’s prime Zacks #1 Rank stocks, here’s the full list.
Carpenter Technology currently boasts a Zacks Rank #1. CRS has outperformed the Zacks Consensus Estimate in three of the last four quarters and matched it once, with an average earnings surprise of 12.2%. The company’s shares have appreciated by 64.8% in the past year.
Hawkins’ earnings estimate for the ongoing fiscal year stands at $3.61 per share, hinting at a year-over-year growth of 26.2%. The Zacks Consensus Estimate for HWKN’s full-year earnings has been lifted by 4.3% over the past 30 days. HWKN, holding a Zacks Rank #2 (Buy), exceeded the consensus estimate in each of the last four quarters, managing an average earnings surprise of 30.6%. The corporation’s stock has surged by approximately 77.5% over the past year.
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The perspectives shared in this article are those of the author and do not necessarily align with Nasdaq, Inc.’s standpoint.
