Goldman Sachs Downgraded Eastman Chemical and Lowered PT After Disappointing Earnings

In a report published Thursday, Goldman Sachs analyst Robert Koort downgraded Eastman Chemical Company (NYSE: EMN) from Buy to Neutral, lowered the PT, and removed the company from Goldman's Conviction List.

Eastman Chemical has been successful, up 58 percent since being added to the Conviction List and up 53 percent since being upgraded to Buy. Koort noted that reported 3Q13 EBIT missed expectation and Eastman Chemical lowered FY2013 EPS by $0.10 despite the tax benefit.

Due to earnings results and the company's updated guidance, Goldman Sachs lowered EPS estimates and the PT from $93 to $89. The analyst's 2013 estimates moved from $6.46 to $6.38, 2014 lowered from $7.13 to $6.86, and 2015 from $7.94 to $7.66.

The analyst commented that management's 2015 EPS goal of $8 is no longer possible. Further, he wrote, “we believe the completion of the re-rating may now be difficult with investor focus over the next 3-6 months likely to shift back to rising propane costs and price erosion in what was thought to be a specialty business (Adhesives). We also believe that it will be difficult for EMN to make progress on efforts to divest its ethylene crackers to further the transformation as long as WLK holds key pipeline rights.”

Eastman Chemical closed at $82.18 on Thursday.