Eastman Chemical Earnings: End of Destocking Should Drive Profit Recovery

After updating our model to incorporate Eastman Chemical's fourth-quarter results, we maintain our $125 fair value estimate. Our narrow moat rating is also unchanged. Eastman's results were in line with our view that the customer inventory destocking that weighed on 2023 volume and profit would slow in the fourth quarter and largely be complete by mid-2024. During the quarter, total volume was down 2% versus the prior-year quarter, a sign of improving demand versus the 9% volume decline for the year.