If you have been wondering whether Eastman Chemical is starting to look like a bargain after its long slide, you are not alone. This article is going to dig into whether the current price really stacks up to its fundamentals.
The stock trades around $61.53 after a choppy run, with a modest 0.7% gain over the last 30 days but a steep drop of about 30.5% year to date and 36.6% over the past year. This signals that sentiment has shifted much faster than the underlying business.
Recently, the market has been reacting to a mix of macro headlines around industrial demand, input costs, and chemical sector regulation. All of these factors feed into expectations for Eastman Chemical’s future cash flows. These developments have kept investors on edge, even as management continues to emphasize portfolio simplification and specialty materials growth as long term value drivers.
Despite the weak share price performance, our valuation framework gives Eastman Chemical a 5/6 valuation score, suggesting it screens as undervalued on most of the checks we run. Next we will walk through those different valuation approaches, before finishing with a more holistic way to think about what the stock might really be worth.
Find out why Eastman Chemical’s -36.6% return over the last year is lagging behind its peers.
A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can return to shareholders in the future and then discounting those dollars back to today. For Eastman Chemical, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $.
Eastman’s latest twelve month free cash flow is about $330.8 Million. Analyst estimates, supplemented by Simply Wall St extrapolations, suggest free cash flow could rise to roughly $1.04 Billion by 2035, with intermediate years climbing through the $600 Million to $900 Million range as the business scales.
When those projected cash flows are discounted back, the intrinsic value comes out at about $118.70 per share. Compared with the current price around $61.53, the DCF implies the shares trade at roughly a 48.2% discount, which indicates that the market is pricing in far weaker cash flow or higher risk than this model assumes.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Eastman Chemical is undervalued by 48.2%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.
EMN Discounted Cash Flow as at Dec 2025
Story Continues
For profitable companies like Eastman Chemical, the price to earnings (PE) ratio is a practical way to gauge value because it links what investors are paying directly to the profits the business is generating today. In general, faster growth and lower perceived risk justify a higher “normal” PE, while slower growth or higher uncertainty call for a lower one.
Eastman currently trades at about 10.0x earnings, which is well below both the chemicals industry average of roughly 23.4x and the peer group average of about 19.8x. That raw comparison suggests the market is assigning a sizable discount to Eastman’s earnings stream.
Simply Wall St’s Fair Ratio framework refines this view by estimating what PE multiple would be appropriate given Eastman’s specific earnings growth outlook, margins, risk profile, industry, and market cap. For Eastman, the Fair Ratio is 20.1x, indicating that, after adjusting for these fundamentals, the stock arguably deserves to trade at about double its current multiple. Because the actual PE of 10.0x sits well below this Fair Ratio, the PE analysis points to the shares being undervalued on an earnings basis.
Result: UNDERVALUED
NYSE:EMN PE Ratio as at Dec 2025
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Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of a company’s story with your expectations for its future revenue, earnings, margins, and ultimately its fair value. A Narrative on Simply Wall St is your own scenario for a business, where you spell out what you think will drive results, translate that into a financial forecast, and then see what price would make sense based on those assumptions. Narratives live inside the Community page on Simply Wall St, where millions of investors can create, compare, and refine their views, and they update dynamically as new information like earnings reports or major news arrives. This can make it easier to decide when to buy or sell by comparing the Fair Value from your Narrative to Eastman Chemical’s current share price. For example, one investor might see cost savings and recycling growth justifying a fair value near the most bullish target of about $100, while a more cautious investor worried about trade and demand risks might anchor closer to the low end near $60. Narratives help both of them track how new data supports or challenges their view.
Do you think there’s more to the story for Eastman Chemical? Head over to our Community to see what others are saying!
NYSE:EMN Community Fair Values as at Dec 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include EMN.
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