UPDATE: JPMorgan Upgrades Eastman Chemical (EMN) to Overweight

JPMorgan upgraded Eastman Chemical (NYSE: EMN) from Neutral to Overweight with a price target of $90.00 (from $75.00). Analyst Jeffrey J. Zekauskas noted recent underperformance relative to peers and in absolute terms.

"[Eastman] has not been able to benefit from lower raw material costs, principally ethane and propane, to the extent of the other companies because of adverse hedges or forward purchases of propane that it had put in place. In addition, Eastman is not as sensitive to the oil price curve as the other petrochemical companies, because its petrochemical leverage is relatively smaller," said Zekauskas.

"Since the beginning of 2015 LYB’s share price is 32% higher, WLK’s up 25%, Dow lifted 13% and Eastman grew 4% versus a 2% rise in the S&P averages. Over the previous one year period, LyondellBasell is 12% higher, Dow 5%, Westlake is 2% higher and Eastman Chemical is (7%) lower versus a 12% rise in the S&P. Eastman's free cash flow yield, based on our 2015 EPS estimate is 7.8% versus 7.2% for LyondellBasell, 3.1% for Dow Chemical, and 3.4% for Westlake. Eastman’s free cash flow yield, based on our 2016 EPS forecast is 7.5% versus LyondellBasell at 6.5%, Dow Chemical at 5.3%, and Westlake at 5.1%," continued the analyst, adding, "Should Eastman trade at a free cash flow yield of 6.8% for 2015, the shares should reach $90."

For an analyst ratings summary and ratings history on Eastman Chemical click here. For more ratings news on Eastman Chemical click here.

Shares of Eastman Chemical closed at $78.66 yesterday.

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