Eastman Chemical (EMN) is expected to see muted upside in 2026 due to persistent demand weakness, reduced product premiums, lower capital investment, and a slower ramp-up at Kingsport, RBC Capital Markets said in a note Friday.

RBC now expects only a modest improvement next year, driven by about $100 million in cost cuts, a $50 million reversal in asset utilization drag, and incremental gains from Kingsport, according to the note.

However, continued macro pressure given inflation, weak demand for durables, and a slow recovery in methanolysis volumes are constraints on Eastman Chemical's earnings potential, the investment firm said.

Earnings before interest, taxes, depreciation, and amortization estimates for fiscal 2026 were lowered to $1.50 billion from $1.55 billion, while the 2026 earnings before interest and taxes forecast for the Fibers segment was cut around 3% to $280 million, RBC said.

Chemical Intermediates are now expected to remain near break-even next year due to ongoing margin challenges, RBC said.

RBC downgraded Eastman Chemical to sector perform from outperform and lowered its price target to $70 from $74.

Shares of the company were down about 2.9% in recent trading.

Price: 68.43, Change: -1.80, Percent Change: -2.56