Eastman Chemical Company EMN is raising the prices of Benzoic Acid effective Sep 1 or as contracts permit.

The company is lifting off-list prices of Benzoic Acid by 3 cents per lb due to elevated operating costs, especially of raw materials. Eastman Chemical is taking appropriate pricing actions in the wake of raw material cost inflation.

Eastman Chemical noted, during its second-quarter earnings call, that strong volume gains in the specialty businesses and disciplined cost management have helped it achieve strong earnings growth in the first half of 2018. The company continues to expect adjusted earnings per share year-over-year growth for 2018 of 10-14%.

Eastman Chemical has outperformed the industry in a year’s time. While shares of the company have moved up around 16.9%, the industry saw a roughly 6.3% rise.

The company is focused on productivity and cost-cutting actions, which are helping it offset raw material cost inflation and other cost headwinds. Eastman Chemical expects to deliver $100 million of cost savings in 2018 under its cost-reduction program.

Eastman Chemical is seeing a rise in raw materials costs and the same is expected to persist in the second half of 2018. It is also exposed to volatility in ethylene prices. Nevertheless, the company’s productivity measures and actions to increase selling prices of its products are likely to help it offset the impact of these headwinds.

Eastman Chemical Company Price and Consensus

Zacks Rank & Stocks to Consider

Eastman Chemical is a Zacks Rank #3 (Hold) stock.

Some better-ranked companies in the basic materials space are Huntsman Corporation HUN, Air Products and Chemicals, Inc. APD and LyondellBasell Industries N.V. LYB.

Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1 (Strong Buy). The company’s shares have rallied 23.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Air Products has an expected long-term earnings growth rate of 12.8% and a Zacks Rank #2 (Buy). Its shares have gained 7.7% in a year’s time.

LyondellBasell has an expected long-term earnings growth rate of 9.5% and carries a Zacks Rank #2. The stock has rallied 28.4% in a year.

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