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Eastman Chemical (EMN) Amends $1.5 Billion Credit Facility

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Eastman Chemical Company (EMN - Free Report) recently announced amendments to and the extension of its five-year unsecured revolving credit facility worth $1.5 billion. The amendments include the extension of the term of the existing unsecured revolving credit agreement, scheduled to expire in October 2023, and the addition of sustainability-linked pricing terms.

The credit facility’s term has been extended to Dec 3, 2026, along with provisions to stretch the maturity by up to two more years and increase borrowings to $2 billion. The company’s credit ratings and fees for the credit agreement will depend on the performance of the company in three sustainability-linked areas. These areas include reduction in greenhouse gas emissions, plastic waste recycling and higher proportion of women in professional or managerial positions.

The company stated that linking its revolving credit facility to sustainability objectives supports its drive to create a sustainable and inclusive environment that holistically addresses climate change and the plastic waste crisis.

Shares of Eastman Chemical have increased 9% in the past year compared with a 12.2% rise of the industry.

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Eastman Chemical, in its last earnings call, stated that it is seeing sustained logistics challenges, supply-chain issues and higher raw material and energy costs as it enters the fourth quarter. It is implementing price hikes across its specialty product lines to offset higher costs.

It expects adjusted earnings per share of $8.80-$9.00 for 2021. It also anticipates free cash flow to reach $1.1 billion for the year.

 

Zacks Rank & Key Picks

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Celanese Corporation (CE - Free Report) , The Chemours Company (CC - Free Report) and Nucor Corporation (NUE - Free Report) .

Celanese has an expected earnings growth rate of 139.5% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 8.7% upward in the past 60 days.

Celanese beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 12.7%, on average. The stock has increased around 22.4% in a year. CE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for the current year has been revised 10% upward in the past 60 days.

Chemours beat the Zacks Consensus Estimate for earnings in all of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 34.2%, on average. CC has increased around 19.6% over a year. CC currently sports a Zacks Rank #1.

Nucor has a projected earnings growth rate of 583.2% for the current year. The consensus estimate for the current year has been revised 7.2% upward in the past 60 days.

Nucor beat the Zacks Consensus Estimate for earnings in two of the last four quarters. NUE has a trailing four-quarter earnings surprise of 2.7%, on average. The company’s shares have gained around 102.1% in a year. It currently carries a Zacks Rank #2.

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