Eastman Chemical Co.

Overview Key strengths Key risks Integrated producer of a broad range of advanced materials, chemicals, and fibers with widespread applications. Exposure to cyclical end-markets and potential earnings volatility. Increasing emphasis on relatively stable, high-margin, specialty chemicals. S&P Global Ratings expects about a 20%-30% risk of recession, though less likely before 2023. We expect credit measures will remain appropriate for the current rating after considering potential volatility. Some manufacturing site concentration associated with the large Kingsport, Tenn. facility. Through sizable acquisitions over the past decade, Eastman has been successful at transforming itself from a commodity-focused company to a majority-specialty chemicals company. The company is poised to make market share gains, particularly within its AFP and AM segments. The company continued to

...The company continues to benefit from its increasing emphasis on relatively stable, high-margin, specialty chemicals. Through sizable acquisitions over the past decade, Eastman has been successful at transforming itself from a commodity-focused company to a majority-specialty chemicals company. The company is poised to make market share gains, particularly within its AFP and AM segments. The company continued to achieve good pricing gains in those segments during the first quarter of 2022 despite raw material cost inflation. While it could see a modest dip in profitability this year due to the ongoing inflation-related challenges and the costs incurred related to the steam line failure at its Kingston site in January, Eastman's adjusted EBITDA margins should remain high and relatively stable, in the 19%-20% area....

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