Eastman Chemical (EMN) Outlook Cut To Negative By S&P Amid Tariff Impact

Eastman Chemical Company (NYSE:EMN) ranks 8th on our list of the S&P 500 stocks with a low PE ratio. On August 14, S&P Global Ratings downgraded EMN’s outlook to Negative from Stable, noting that there are sector pressures. The firm kept its ‘BBB’ rating intact.

According to the rating agency, trade tensions and tariffs are anticipated to exert more pressure on product demand and shake up Eastman’s 2025 performance. During its Q2 earnings call, the company noted that American tariffs and retaliatory measures have made operations tougher, worsening demand that has already been lagging for two years.

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Eastman is adjusting its global inventory and material distribution, focusing on early sales in cyclical end markets, including construction, automotive, and consumer durables, to combat tariff pressures. The company expects mid-single-digit percentage drops in H2 2025.

S&P expects that Eastman’s FFO-to-debt ratio could reach 21% this year, the lower bound for the current rating. The company also faces multiple profit challenges in 2025. The company’s commodity chemicals business is also suffering from Chinese production, with management citing export market strain.

The negative outlook reflects a roughly 33% risk that Eastman’s credit metrics could weaken below rating standards in the next two years. S&P estimates that cash from operations will potentially drop to nearly $1 billion in 2025, down $200 million from the last guidance, following $1.1 billion in 2023 and $1.3 billion in 2024.

Eastman Chemical Company (NYSE:EMN), founded in 1920 and based in Tennessee, is a specialty materials company operating globally, with business segments including Additives & Functional Products, Advanced Materials, Chemical Intermediates, and Fibers.

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