Here's Why You Should Invest in Celanese (CE) Stock Now

Celanese Corporation CE is gaining from its productivity measures, investments in organic projects and strategic acquisitions. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock an intriguing choice for investors right now.

Estimates Going Up

Over the past three months, the Zacks Consensus Estimate for Celanese for the current year has increased around 13.6%. The consensus estimate for second-quarter 2022 has also been revised 6.6% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Positive Earnings Surprise History

Celanese has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 8.7%, on average.

Superior Return on Equity (ROE)

ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Celanese is 50%, above the industry’s level of 24.9%.

Growth Drivers in Place

Celanese is benefiting from its cost and productivity actions, investments in high-return organic projects and synergies of acquisitions. The company is also gaining from higher demand in most of its end markets.

The company continues to actively pursue acquisitions, which are providing it opportunities for additional growth, investment and synergies. The acquisitions of SO.F.TER., Nilit and Omni Plastics are expected to contribute to earnings expansion in the company's Engineered Materials segment. The Elotex acquisition also strengthened the company’s position in the vinyl acetate ethylene emulsions space. The buyout is expected to contribute to volumes in the Acetyl Chain segment.

The purchase of Exxon Mobil's Santoprene business also broadens the company’s portfolio of engineered solutions and enables it to offer a wider range of functionalized solutions to targeted growth areas, including future mobility, medical and sustainability. Celanese expects the acquisition to be accretive to its 2022 adjusted earnings per share and free cash flow.

Celanese, in Feb 2022, also entered into an agreement with DuPont to acquire the majority of the latter’s Mobility & Materials segment for cash proceeds of $11 billion. Through this deal, Celanese will be able to enhance its growth in high-value applications. It expects to achieve run-rate synergies of around $450 million within the first four years following the completion of the deal. The buyout is expected to be immediately accretive to the company’s adjusted earnings per share.

Celanese also remains focused on executing its productivity programs that include the implementation of a number of cost reduction capital projects. Productivity actions are expected to support to its margins.

 

Celanese Corporation Price and Consensus

 

Celanese Corporation Price and Consensus

Celanese Corporation price-consensus-chart | Celanese Corporation Quote

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. NTR, Albemarle Corporation ALB and Cabot Corporation CBT.

Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 22.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has gained roughly 40% in a year.

Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 112.4% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has rallied roughly 33% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 14% over a year.

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