Why Has Kodak Stock Doubled?

January 16th, 2025 by Trefis Team
KODK: Eastman Kodak logo
KODK
Eastman Kodak

Eastman Kodak (NYSE:KODK) stock has more than doubled in one year from levels of $3.40 to almost $7 now. Kodak company is a global manufacturer focused on commercial print and advanced materials and chemicals. The company’s stock has surged recently, reaching its highest levels in more than three years, due to positivity surrounding its innovation efforts and strategic shifts. The company has focused on growth areas such as battery technology and modernized manufacturing. Kodak has benefited from a favorable ruling on tariffs by the U.S. International Trade Commission (ITC) – these changes likely reduced costs for imported components or materials critical to Kodak’s manufacturing and innovation efforts. This decision has been a boost to Kodak’s profitability and investor confidence, complementing its broader strategic focus on advanced materials and battery technology.

In Q3 2024, Kodak reported mixed results. Revenue decreased by 3% to $261 million, and gross profit margins dropped from 19% to 17%. However, net income saw a significant increase, rising to $18 million compared to $2 million in the same quarter of 2023. The improvement in profitability was attributed to operational efficiencies and strategic cost management.

What is Kodak’s innovation strategy?

Kodak’s innovation strategy focuses on leveraging its expertise in advanced materials and chemicals. Key initiatives include investments in battery technologies, particularly for energy storage, and modernizing its film and manufacturing processes. The company is also exploring substrate coatings and other industrial applications. These efforts aim to diversify its product portfolio and adapt to evolving market demands while improving profitability and sustainability. This strategy reflects a shift from its traditional photography business to broader technological applications.
The decrease in KODK stock over the last 3-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were -43% in 2021, -35% in 2022, 28% in 2023, and 68% in 2024. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period.
Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment around rate cuts and multiple wars, could KODK face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months – or will it see a recovery?
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So, what’s next for Kodak?

Kodak’s stock trajectory depends on several factors, including its ability to sustain profitability, expand its investments in advanced materials and battery technology, and leverage favorable trade conditions. Recent momentum reflects strong investor interest, but challenges like weak gross profit margins remain. There is a potential for continued growth if the company successfully executes its innovation strategy and maintains financial improvements.

 Returns Jan 2025
MTD [1]		 Since start
of 2024 [1]		 2017-25
Total [2]
 KODK Return 7% 80% -55%
 S&P 500 Return 1% 25% 166%
 Trefis Reinforced Value Portfolio 1% 17% 758%

[1] Returns as of 1/16/2025
[2] Cumulative total returns since the end of 2016

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