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EMN

Eastman Chemical Co – Plastics Material and Resin Manufacturing
Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company's innovation-driven growth model takes advantage of world- class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end-markets such as transportation, building and construction, and consumables. As a globally inclusive and diverse company, Eastman employs approximately 14,500 people around the world and serves customers in more than 100 countries. The company had 2019 revenues of approximately $9.3 billion and is headquartered in Kingsport, Tennessee, USA.
Analysis Results
Intrinsic Value $524.74
Latest Price $101.91
Relative Value 81% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 5.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 2.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 5.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.75 1.7
2023 1.85 1.75
2024 1.96 1.8
2025 2.07 1.85
2026 2.2 1.9
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 65.9 billion. This corresponds to a present value of 55.5 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 8.99 billion. Adding in the terminal value gives a total present value of 64.4 billion.

There are presently 123.0 million outstanding shares, so the intrinsic value per share is 524.74.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,646,000,000
Current Cash 459,000,000
Current Liabilities 2,971,000,000
Current Debt 747,000,000
Non-Cash Working Capital (NCWC) 1,963,000,000
Change in NCWC 675,000,000
EBIT 1,451,000,000
Tax Provision 215,000,000
Depreciation and Amortization 538,000,000
Capital Expenditure -578,000,000
Unlevered Free Cash Flow 1,797,677,449
Current Assets 3,541,000,000
Current Cash 564,000,000
Current Liabilities 2,038,000,000
Current Debt 349,000,000
Non-Cash Working Capital (NCWC) 1,288,000,000
Change in NCWC -211,000,000
EBIT 1,095,000,000
Tax Provision 41,000,000
Depreciation and Amortization 574,000,000
Capital Expenditure -383,000,000
Unlevered Free Cash Flow 990,292,452
Current Assets 3,321,000,000
Current Cash 204,000,000
Current Liabilities 1,789,000,000
Current Debt 171,000,000
Non-Cash Working Capital (NCWC) 1,499,000,000
Change in NCWC -32,000,000
EBIT 1,309,000,000
Tax Provision 140,000,000
Depreciation and Amortization 611,000,000
Capital Expenditure -425,000,000
Unlevered Free Cash Flow 1,259,829,268
Current Assets 3,365,000,000
Current Cash 226,000,000
Current Liabilities 1,851,000,000
Current Debt 243,000,000
Non-Cash Working Capital (NCWC) 1,531,000,000
Change in NCWC 168,000,000
EBIT 1,523,000,000
Tax Provision 226,000,000
Depreciation and Amortization 604,000,000
Capital Expenditure -528,000,000
Unlevered Free Cash Flow 1,504,253,435
Current Assets 3,143,000,000
Current Cash 191,000,000
Current Liabilities 1,982,000,000
Current Debt 393,000,000
Non-Cash Working Capital (NCWC) 1,363,000,000
Change in NCWC 190,000,000
EBIT 1,540,000,000
Tax Provision -99,000,000
Depreciation and Amortization 587,000,000
Capital Expenditure -649,000,000
Unlevered Free Cash Flow 1,668,000,000
Current Assets 2,866,000,000
Current Cash 181,000,000
Current Liabilities 1,795,000,000
Current Debt 283,000,000
Non-Cash Working Capital (NCWC) 1,173,000,000
Change in NCWC 213,000,000
EBIT 1,428,000,000
Tax Provision 190,000,000
Depreciation and Amortization 580,000,000
Capital Expenditure -626,000,000
Unlevered Free Cash Flow 1,336,353,670
Current Assets 2,878,000,000
Current Cash 293,000,000
Current Liabilities 2,056,000,000
Current Debt 431,000,000
Non-Cash Working Capital (NCWC) 960,000,000
Change in NCWC -278,000,000
EBIT 1,567,000,000
Tax Provision 275,000,000
Depreciation and Amortization 571,000,000
Capital Expenditure -652,000,000
Unlevered Free Cash Flow 826,312,666
Current Assets 3,173,000,000
Current Cash 214,000,000
Current Liabilities 2,022,000,000
Current Debt 301,000,000
Non-Cash Working Capital (NCWC) 1,238,000,000
Change in NCWC 105,000,000
EBIT 1,239,000,000
Tax Provision 235,000,000
Depreciation and Amortization 450,000,000
Capital Expenditure -596,000,000
Unlevered Free Cash Flow 903,893,939
Current Assets 2,840,000,000
Current Cash 237,000,000
Current Liabilities 1,470,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,133,000,000
Change in NCWC 148,000,000
EBIT 1,938,000,000
Tax Provision 507,000,000
Depreciation and Amortization 433,000,000
Capital Expenditure -488,000,000
Unlevered Free Cash Flow 1,445,790,946
Current Assets 2,594,000,000
Current Cash 249,000,000
Current Liabilities 1,364,000,000
Current Debt 4,000,000
Non-Cash Working Capital (NCWC) 985,000,000
Change in NCWC 421,000,000
EBIT 920,000,000
Tax Provision 206,000,000
Depreciation and Amortization 360,000,000
Capital Expenditure -470,000,000
Unlevered Free Cash Flow 938,981,510

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