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6 Reasons That Make Celanese (CE) an Attractive Pick
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Celanese Corporation’s (CE - Free Report) stock looks promising at the moment. The company, currently carrying a Zacks Rank #2 (Buy), has seen its shares rally roughly 34% year to date. If you haven’t taken advantage of the share price appreciation yet, the time is right for you to add the stock to portfolio as it is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an attractive investment option.
What’s Driving Celanese?
An Outperformer: Celanese has outperformed the industry it belongs to over a year. The company’s shares have moved up 35.3% over this period, compared with roughly 27% gain recorded by the industry.
Positive Earnings Surprise History: Celanese has outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 2.5%.
Estimates Moving Up: Annual estimates for Celanese have moved north over the past three months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2017 has increased by around 0.5% to $7.37 per share. The Zacks Consensus Estimate for 2018 has also moved up 1.6% over the same timeframe to $8.23.
Superior Return on Equity(ROE): Celanese’s ROE of 32%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Strong Q3 and Positive Outlook: Celanese kept its earnings streak alive with a beat in third-quarter 2017. The company logged adjusted earnings per share of $1.93, up 15.6% from $1.67 reported a year ago, also beating the Zacks Consensus Estimate of $1.92. Revenues went up roughly 18% year over year to $1,566 million and also topped the Zacks Consensus Estimate of $1,511 million.
Celanese, during third-quarter earnings call, said that it remains optimistic that it can grow its adjusted earnings per share for 2017 toward the top end of its earlier announced guidance range of 9-11%. It also sees continued improvements in its acetyl’s chain and materials businesses.
Growth Drivers: Celanese’s strategic initiatives, including operational cost savings through productivity actions and efficiency enhancement, are expected to provide an impetus to earnings.
Celanese is also well placed to gain from acquisitions and its acetate tow joint venture (JV) with Blackstone. The purchase of Italy-based SO.F.TER. Group has strengthened Celanese’s solutions capability and project pipeline. SO.F.TER. Group’s modern manufacturing facilities and product portfolio will also offer opportunities for additional growth, investment and synergies. The acquisition of Nilit's nylon compounding unit is also in sync with Celanese’s plans to become a leading, global nylon compound supplier.
Moreover, in June 2017, Celanese and funds managed by Blackstone entered into an agreement to form a JV that will create a global acetate tow supplier, where the former will own 70% of the JV and Blackstone the remaining 30%.
The JV will have an expanded global production footprint including eight fully-owned manufacturing plants and three existing JV sites. The new company will be well placed to more efficiently address customers’ needs and offer the best of quality and services.
Celanese also remains committed to expand capacity. The company, last month, said that it plans to expand the capacity of certain product-specific manufacturing production sites and global compounding assets to augment growth in its engineered materials business. Celanese will be adding production lines in China, the United States and Italy that are expected to raise compounding capacity by around 100 kilo tons per year.
Celanese also completed major debottlenecking projects and product transfers at its global manufacturing plants. The move will support project pipeline growth and meet customers demand in the company’s engineered materials segment.
Westlake has an expected long-term earnings growth of 10.4%. Its shares are up roughly 68% year to date.
Ingevity has an expected long-term earnings growth of 12%. The stock has gained around 36% year to date.
Kraton has an expected earnings growth of 25.4% for the current year. Its shares are up roughly 67% year to date.
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While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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6 Reasons That Make Celanese (CE) an Attractive Pick
Celanese Corporation’s (CE - Free Report) stock looks promising at the moment. The company, currently carrying a Zacks Rank #2 (Buy), has seen its shares rally roughly 34% year to date. If you haven’t taken advantage of the share price appreciation yet, the time is right for you to add the stock to portfolio as it is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an attractive investment option.
What’s Driving Celanese?
An Outperformer: Celanese has outperformed the industry it belongs to over a year. The company’s shares have moved up 35.3% over this period, compared with roughly 27% gain recorded by the industry.
Positive Earnings Surprise History: Celanese has outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 2.5%.
Estimates Moving Up: Annual estimates for Celanese have moved north over the past three months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2017 has increased by around 0.5% to $7.37 per share. The Zacks Consensus Estimate for 2018 has also moved up 1.6% over the same timeframe to $8.23.
Superior Return on Equity (ROE): Celanese’s ROE of 32%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Strong Q3 and Positive Outlook: Celanese kept its earnings streak alive with a beat in third-quarter 2017. The company logged adjusted earnings per share of $1.93, up 15.6% from $1.67 reported a year ago, also beating the Zacks Consensus Estimate of $1.92. Revenues went up roughly 18% year over year to $1,566 million and also topped the Zacks Consensus Estimate of $1,511 million.
Celanese, during third-quarter earnings call, said that it remains optimistic that it can grow its adjusted earnings per share for 2017 toward the top end of its earlier announced guidance range of 9-11%. It also sees continued improvements in its acetyl’s chain and materials businesses.
Growth Drivers: Celanese’s strategic initiatives, including operational cost savings through productivity actions and efficiency enhancement, are expected to provide an impetus to earnings.
Celanese is also well placed to gain from acquisitions and its acetate tow joint venture (JV) with Blackstone. The purchase of Italy-based SO.F.TER. Group has strengthened Celanese’s solutions capability and project pipeline. SO.F.TER. Group’s modern manufacturing facilities and product portfolio will also offer opportunities for additional growth, investment and synergies. The acquisition of Nilit's nylon compounding unit is also in sync with Celanese’s plans to become a leading, global nylon compound supplier.
Moreover, in June 2017, Celanese and funds managed by Blackstone entered into an agreement to form a JV that will create a global acetate tow supplier, where the former will own 70% of the JV and Blackstone the remaining 30%.
The JV will have an expanded global production footprint including eight fully-owned manufacturing plants and three existing JV sites. The new company will be well placed to more efficiently address customers’ needs and offer the best of quality and services.
Celanese also remains committed to expand capacity. The company, last month, said that it plans to expand the capacity of certain product-specific manufacturing production sites and global compounding assets to augment growth in its engineered materials business. Celanese will be adding production lines in China, the United States and Italy that are expected to raise compounding capacity by around 100 kilo tons per year.
Celanese also completed major debottlenecking projects and product transfers at its global manufacturing plants. The move will support project pipeline growth and meet customers demand in the company’s engineered materials segment.
Celanese Corporation Price and Consensus
Celanese Corporation Price and Consensus | Celanese Corporation Quote
Other Stocks to Consider
Other top-ranked companies in the basic materials space include Westlake Chemical Corporation (WLK - Free Report) , Ingevity Corporation (NGVT - Free Report) and Kraton Corporation , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Westlake has an expected long-term earnings growth of 10.4%. Its shares are up roughly 68% year to date.
Ingevity has an expected long-term earnings growth of 12%. The stock has gained around 36% year to date.
Kraton has an expected earnings growth of 25.4% for the current year. Its shares are up roughly 67% year to date.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>