Eastman Chemical Company (EMN) Intrinsic Value & DCF Valuation
Chemicals - Specialty · NYSE
Current Price
$66.39
Intrinsic Value
$64.94
-2.2% margin of safety
What Is Eastman Chemical Company's Intrinsic Value?
As of 2026-10-28, the base-case DCF model estimates the intrinsic value of Eastman Chemical Company (EMN) at $64.94 per share, compared with a market price of $66.39, a margin of safety of -2.2%. The base case assumes 2.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $50.7 to $81.51. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Eastman Chemical Company (EMN) Undervalued?
At $66.39, EMN trades about 2.2% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Proprietary Technology & Innovation
Eastman possesses unique chemical formulations and processes, particularly in advanced materials. This allows for differentiated products and higher margins.
↑Strong Customer Relationships
Long-standing partnerships with key customers in diverse end markets create switching costs. These relationships are built on tailored solutions and reliable supply.
↑Economies of Scale
Large-scale manufacturing facilities provide cost advantages in production. This scale is difficult for smaller competitors to replicate, especially in specialized chemicals.
INVESTMENT RISKS
↓Cyclical End-Market Demand
Demand for Eastman's products is tied to broader economic cycles in industries like automotive and construction. Downturns can significantly impact sales volumes.
↓Environmental Regulations
Increasingly stringent environmental regulations globally can lead to higher compliance costs and potential operational disruptions. This requires ongoing investment in sustainable practices.
↓Geopolitical and Supply Chain Disruptions
Global events can disrupt raw material sourcing and product distribution. This necessitates robust supply chain management and diversification strategies.
Base case
EMN base case valuation
Intrinsic Value
$64.94
Margin of safety
-2.2%
Expected annual return
-0.4%
Base case assumptions: 2.2% annual growth, 10.0% discount rate, 14.03x exit multiple, 5 year projection. Data as of 2026-10-28.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the EMN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Eastman Chemical Company respond.
Open DCF Calculator for EMNCompany Overview
Eastman Chemical Company functions as a worldwide provider of specialized materials. Its Additives & Functional Products division offers a comprehensive range, including hydrocarbon and rosin resins, organic acid-based solutions, and amine-derived building blocks. This segment also provides agricultural chemicals like metam-based soil fumigants, thiram and ziram fungicides, and plant growth regulators. Additional offerings include specialty coalescents, various commodity and specialty solvents, paint additives, specialty polymers, heat transfer and aviation fluids, and rubber additives such as insoluble sulfur and anti-degradants, along with performance resins. These products cater to diverse sectors such as transportation, personal care, wellness, food, agriculture, construction, water treatment, energy, consumables, durables, and electronics. The Advanced Materials segment produces high-performance products including copolyesters, cellulosic biopolymers, cellulose esters, and polyvinyl butyral (PVB) sheets. It further supplies a variety of window and protective films, including those applied aftermarket, for high-value applications in transportation, consumer durables, electronics, building and construction, medical, pharmaceutical, and general consumables markets. Through its Chemical Intermediates segment, Eastman delivers essential chemical building blocks. This encompasses methylamines and their salts, various higher amines and solvents, olefin and acetyl derivatives, ethylene, and both primary phthalate and non-phthalate plasticizers, including specialized non-phthalate alternatives. These intermediates are vital for industrial chemical processes, construction, health and wellness products, and agrochemical formulations. Lastly, the Fibers segment is a significant producer of cellulose acetate tow, triacetin, cellulose acetate flake, acetic acid, and acetic anhydride, primarily for filtration media, notably cigarette filters. It also furnishes natural and solution-dyed acetate yarns for consumables and health and wellness markets, alongside wet-laid nonwoven media, specialty engineered papers, and cellulose acetate fibers for the transportation, industrial, agriculture, mining, and aerospace industries. Eastman Chemical Company was founded in 1920 and is headquartered in Kingsport, Tennessee.
Financial Metrics — EMN Stock Valuation Data
Revenue/Share (TTM)
$77.56
FCF/Share (TTM)
$4.72
ROIC (TTM)
5.1%
ROE (TTM)
7.4%
P/FCF
14.1x
EV/EBITDA
9.5x
FCF Yield
7.13%
Debt/Equity
0.86x
Based on trailing twelve-month data, EMN shows a free cash flow per share of $4.72 and a ROIC of 5.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 14.1x and FCF yield of 7.13% are important context metrics when evaluating EMN's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of EMN?
Eastman Chemical Company currently generates $4.72 in free cash flow per share. At the current price of $66.39, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is EMN undervalued?
EMN trades at a P/FCF ratio of 14.1x with a free cash flow yield of 7.13%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether EMN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value EMN stock using DCF?
To perform a DCF valuation on Eastman Chemical Company: (1) Start with the trailing free cash flow per share ($4.72) as the base, (2) project future FCF growth over 5-10 years based on Chemicals - Specialty industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting EMN's risk profile — with a debt-to-equity of 0.86x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to EMN?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Eastman Chemical Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Chemicals - Specialty trends, then discounting those amounts to today's dollars. EMN's ROIC of 5.1% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect EMN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EMN, with a debt-to-equity ratio of 0.86x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 9.5x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See EMN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value EMN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.