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Eastman Chemical Welcomes Two Tenants to Its Texas City Site

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Eastman Chemical Company (EMN - Free Report) recently announced collaboration with Air Products, Inc. (APD - Free Report) and Gulf Coast Ammonia for a strategic project.

This strategic project leverages a part of the available land, infrastructure, and deep-water port at Eastman Chemical’s Texas City site. It will create value through a long-term lease, site service and utility cost sharing, and a strategic off-take deal to buy cost-effective ammonia for manufacturing Eastman Chemical’s specialty products.

Notably, Eastman Chemical acquired the Texas City site in August 2011 by purchasing Sterling Chemical, Inc. Soon afterwards, the company restarted idled plasticizer manufacturing capacity to manufacture non-phthalate plasticizers such as Eastman 168 non-phthalate plasticizer.

At Eastman Chemical’s Texas City site, Air Products will construct, own and operate its largest-ever steam methane reformer, an air separation unit for supplying nitrogen and a steam turbine generator for supplying power and certain other utilities for running the new ammonia facility.  Gulf Coast Ammonia will lease a portion of the Texas City site and own a new world-scale ammonia production facility.

Shares of Eastman Chemical have fallen 1.5% in the past year compared with the industry’s decline of 23.1%.

Eastman Chemical anticipates sales volume and capacity utilization to decline in the fourth quarter due to the worsening of the global business environment, resulting from trade uncertainties and other macro factors. Considering the factors, the company anticipates adjusted earnings per share of $7.00-$7.20 for full-year 2019.

Amid the difficult business environment, Eastman Chemical remains focused on managing costs and generating new business revenues from innovation, especially in the Advanced Materials segment.

Eastman Chemical Company Price and Consensus

Zacks Rank & Stocks to Consider

Eastman Chemical currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. (DQ - Free Report) , and Sibanye Gold Limited .

Daqo New Energy has projected earnings growth rate of 294.7% for 2020. The company’s shares have rallied 110.6% in a year. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sibanye Gold has a projected earnings growth rate of 587.5% for 2020 and a Zacks Rank #2 (Buy) at present. The company’s shares have soared 228.7% in a year.

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