Value
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 9.7 |
| EV/EBITDA | 6.2 |
| Fwd P/E | 9.3 |
| PEG | 9.4 |
| Analyst target | 6.0 |
- ▸Forward P/E: 10.0x
- ▸PEG: 0.60
- ▸Attractively valued
EMN · Why this verdict
Why Eastman Chemical (EMN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Eastman Chemical screens attractively on price-to-earnings and PEG metrics, but a Piotroski F-Score of 3 out of 9, no competitive moat, and revenue declining 5% year-over-year indicate the cheapness reflects genuine fundamental weakness; with less than 1% upside remaining to the analyst price target, the risk/reward offers almost no margin of safety.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At less than 1% below the analyst consensus price target, virtually all the expected return from current levels has already been captured, while downside to technical support leaves a risk/reward ratio of 0.15-to-1. Price targets | Either a price correction or a meaningful analyst target revision restores upside above 10% within 12 months. | →Stable |
| CounterThe two most recent quarters produced earnings beats, which could prompt upward analyst target revisions that widen the upside without requiring a price decline. | ||
Despite a forward P/E of 10.7x and a PEG of 0.64 suggesting inexpensive pricing, the underlying business quality falls below the minimum acceptable threshold, with a Piotroski F-Score of 3 out of 9 signaling broad financial weakness and no identifiable competitive moat to protect future earnings. Quality breakdown | Over 12 months, the Piotroski F-Score rises above 6 out of 9, confirming broad improvement in solvency, profitability, and operating efficiency. | →Stable |
| CounterA cyclical trough in specialty chemical spreads can temporarily depress financial-strength metrics; if commodity demand recovers, quality indicators could snap back faster than the current score implies. | ||
Revenue has contracted 5% year-over-year with earnings growth contributing nothing positive, removing the fundamental catalyst that would normally justify a re-rating even from a depressed valuation. Growth breakdown | Revenue growth turns positive year-over-year for at least 2 consecutive quarters, demonstrating that the demand environment has stabilized. | →Stable |
| CounterIndustrial chemical volumes can recover sharply with downstream demand; the 5% revenue decline may already be fully priced into the forward P/E of 10.7x. | ||
After back-to-back misses in the second half of 2025, the two most recent quarters each produced earnings beats, suggesting the pace of operational deterioration may be moderating even while the underlying business quality remains weak. Earnings | The beat streak extends to 4 consecutive quarters by year-end 2026, with average earnings surprise turning meaningfully positive. | →Stable |
| CounterTwo beats following two misses is a thin base; if industrial demand softens further, the miss pattern could resume without any change to the weak structural fundamentals. | ||
At less than 1% below the analyst consensus price target, virtually all the expected return from current levels has already been captured, while downside to technical support leaves a risk/reward ratio of 0.15-to-1.
→StablePrice targets
- Expectation
- Either a price correction or a meaningful analyst target revision restores upside above 10% within 12 months.
CounterThe two most recent quarters produced earnings beats, which could prompt upward analyst target revisions that widen the upside without requiring a price decline.
Despite a forward P/E of 10.7x and a PEG of 0.64 suggesting inexpensive pricing, the underlying business quality falls below the minimum acceptable threshold, with a Piotroski F-Score of 3 out of 9 signaling broad financial weakness and no identifiable competitive moat to protect future earnings.
→StableQuality breakdown
- Expectation
- Over 12 months, the Piotroski F-Score rises above 6 out of 9, confirming broad improvement in solvency, profitability, and operating efficiency.
CounterA cyclical trough in specialty chemical spreads can temporarily depress financial-strength metrics; if commodity demand recovers, quality indicators could snap back faster than the current score implies.
Revenue has contracted 5% year-over-year with earnings growth contributing nothing positive, removing the fundamental catalyst that would normally justify a re-rating even from a depressed valuation.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive year-over-year for at least 2 consecutive quarters, demonstrating that the demand environment has stabilized.
CounterIndustrial chemical volumes can recover sharply with downstream demand; the 5% revenue decline may already be fully priced into the forward P/E of 10.7x.
After back-to-back misses in the second half of 2025, the two most recent quarters each produced earnings beats, suggesting the pace of operational deterioration may be moderating even while the underlying business quality remains weak.
→StableEarnings
- Expectation
- The beat streak extends to 4 consecutive quarters by year-end 2026, with average earnings surprise turning meaningfully positive.
CounterTwo beats following two misses is a thin base; if industrial demand softens further, the miss pattern could resume without any change to the weak structural fundamentals.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 2.4 |
| Gross margin | 0.0 |
| Op margin | 3.9 |
| Net margin | 2.3 |
| Current ratio | 5.4 |
| FCF quality | 7.4 |
| Moat | 3.1 |
| Piotroski F | 3.3 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
Growth
0.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.3 |
| EPS growth | 0.0 |
- ▸Declining revenue: -5%
Momentum
2.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.3 |
| Price target | 7.8 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Analyst upside: 21%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $131,678 (0.002% of mkt cap)
Peer rank
3.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.6 |
| quality rank | 3.8 |
| growth rank | 0.6 |
Technical
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.6 |
| support resistance | 9.1 |
| 52w position | 7.1 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.8 |
| days to cover | 6.2 |
| volatility | 4.8 |
| put call | 5.7 |
| implied vol | 5.2 |
| beta | 6.7 |
| debt equity | 5.6 |
Catalyst
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 477.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.1<4.5
- ASYMMETRY:1.4<1.5@spot
Warning (0)
none
Reward-to-Risk
1.42
Upside
+8.8%
Downside
6.2%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Technical at 8.3 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.1<4.5.
The strongest dimensions are Technical at 8.3, Value at 7.9, and Sentiment at 7.3; the weakest are Growth at 0.7, Momentum at 2.1, and Peer rank at 3.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.42 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Despite a forward P/E of 10.7x and a PEG of 0.64 suggesting inexpensive pricing, the underlying business quality falls below the minimum acceptable threshold, with a Piotroski F-Score of 3 out of 9 signaling broad financial weakness and no identifiable competitive moat to protect future earnings.
Trip ifPiotroski F-Score rises above 6 out of 9 for 2 consecutive quarters, indicating quality has genuinely recovered.
- P2Revenue has contracted 5% year-over-year with earnings growth contributing nothing positive, removing the fundamental catalyst that would normally justify a re-rating even from a depressed valuation.
Trip ifRevenue growth turns positive above 3% year-over-year for 2 consecutive quarters.
- P3At less than 1% below the analyst consensus price target, virtually all the expected return from current levels has already been captured, while downside to technical support leaves a risk/reward ratio of 0.15-to-1.
Trip ifAnalyst consensus price target is revised above $90, restoring upside greater than 20% from the current price.
- P4After back-to-back misses in the second half of 2025, the two most recent quarters each produced earnings beats, suggesting the pace of operational deterioration may be moderating even while the underlying business quality remains weak.
Trip ifEPS surprise falls below 0% in either of the next 2 quarterly reports, breaking the nascent beat streak.