Eastman Chemical Shares: Is the Downturn Bottoming Out?

Eastman Chemical Company finds itself navigating turbulent financial waters. Following a disappointing quarterly performance and the announcement of severe cost-cutting measures, investors are questioning whether the worst is over or if further declines lie ahead. The latest financial results present a challenging picture for shareholders.

In response to mounting operational pressures, the chemical manufacturer has unveiled plans to reduce its global workforce by nearly 7%. This significant restructuring initiative aims to generate approximately $175 million in net cost savings by 2026. The company's Fibers and Chemical Intermediates divisions have been particularly affected by profitability challenges, prompting this aggressive strategic move.

Quarterly Performance Falls Short

The third quarter of 2025 proved particularly difficult for Eastman Chemical, with results falling substantially below market expectations. Adjusted earnings per share plummeted to $1.14, representing a dramatic 49% decrease from the $2.26 reported during the same period last year. The situation appeared even more concerning when examining unadjusted figures, which showed earnings of just $0.40 per share—a staggering 74% decline year-over-year.

Revenue performance mirrored this downward trend, with sales decreasing by 10.6% to $2.20 billion. Company leadership attributed these challenges to weakened consumer demand and inventory reduction efforts among customers across multiple markets.

Should investors sell immediately? Or is it worth buying Eastman Chemical?

Widespread Business Segment Weakness

The company's difficulties extend across all operational divisions. The Advanced Materials unit experienced a 7% revenue contraction, while the Fibers segment suffered a severe 24% decline. This broad-based weakness reflects persistent demand softness in key customer industries, including construction and automotive manufacturing, which have traditionally been significant markets for Eastman's products.

Outlook Remains Cautious Despite Cost Actions

Despite implementing substantial cost reduction measures, Eastman's forward guidance suggests continued headwinds. For the full 2025 fiscal year, management projects adjusted earnings per share between $5.40 and $5.65, figures that remain below analyst consensus estimates. On a more positive note, the company anticipates generating nearly $1 billion in operational cash flow.

Market reaction to these developments has been decidedly negative. Eastman's stock currently trades well below its key moving averages and has surrendered more than 38% of its value since the beginning of the year. While several analysts have significantly reduced their price targets, some institutions maintain buy recommendations. The critical question facing investors is whether these aggressive cost-cutting measures will stabilize the company's trajectory or if Eastman confronts deeper structural challenges within its business model.