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Celanese's (CE) Stock Up 27% in 3 Months: What's Driving It?
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Shares of Celanese Corporation (CE - Free Report) have popped 27.3% in the past three months. The company has also outperformed the industry’s rise of 1.4% over the same time frame. The stock also topped the S&P 500’s 4.6% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock’s price performance.
What’s Going in CE’s Favor?
Forecast-topping first-quarter results and upbeat outlook have contributed to the gain in the company’s shares. Celanese’s adjusted earnings for the first quarter rose to $3.46 per share from $2.29 in the year-ago quarter, and also topped the Zacks Consensus Estimate of $3.01.
Revenues climbed 23% year over year to $1,798 million and beat the Zacks Consensus Estimate of $1,745.8 million. While the company faced disruptions from the winter storm Uri, it benefited from continued improvement in demand in the quarter.
Celanese, in its first-quarter call, stated that demand for its Engineered Materials and Acetyl Chain products remains strong in most end markets. The company also raised its adjusted earnings outlook for 2021 to $12.50-$13.50 per share from its prior view of $11.00-$11.50 per share.
Celanese is gaining from its productivity actions, investments in high-return organic projects and strategic acquisitions. The company is also seeing a recovery in demand across most of its end markets. It is witnessing higher demand in automotive, industrial and electronics applications.
The company remains committed to execute its productivity programs that include the implementation of a number of cost reduction capital projects. It achieved gross savings of $214 million from its productivity actions in 2020. Productivity actions are also expected to support to its margins in 2021.
Moreover, Celanese 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.
Celanese also continues to generate strong cash flows, lower debt levels and remains focused on returning value to its shareholders. The company, in January 2021, raised its quarterly cash dividend by 10% to 68 cents a share. Celanese also generated operating cash flow of $116 million in the first quarter. It also returned $328 million to shareholders through dividends and share repurchases during the quarter.
Earnings estimates for Celanese have also been going up over the past two months. The Zacks Consensus Estimate for the current year has increased around 27.8%. The consensus estimate for second-quarter 2021 has also been revised 62.7% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , Dow Inc. (DOW - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .
Nucor has a projected earnings growth rate of 228.4% for the current year. The company’s shares have rallied around 151% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dow has a projected earnings growth rate of 261.5% for the current year. The company’s shares have shot up around 90% in a year. It currently sports a Zacks Rank #1.
Impala Platinum has an expected earnings growth rate of 225.2% for the current fiscal. The company’s shares have surged around 178% in the past year. It currently carries a Zacks Rank #2 (Buy).
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Celanese's (CE) Stock Up 27% in 3 Months: What's Driving It?
Shares of Celanese Corporation (CE - Free Report) have popped 27.3% in the past three months. The company has also outperformed the industry’s rise of 1.4% over the same time frame. The stock also topped the S&P 500’s 4.6% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock’s price performance.
What’s Going in CE’s Favor?
Forecast-topping first-quarter results and upbeat outlook have contributed to the gain in the company’s shares. Celanese’s adjusted earnings for the first quarter rose to $3.46 per share from $2.29 in the year-ago quarter, and also topped the Zacks Consensus Estimate of $3.01.
Revenues climbed 23% year over year to $1,798 million and beat the Zacks Consensus Estimate of $1,745.8 million. While the company faced disruptions from the winter storm Uri, it benefited from continued improvement in demand in the quarter.
Celanese, in its first-quarter call, stated that demand for its Engineered Materials and Acetyl Chain products remains strong in most end markets. The company also raised its adjusted earnings outlook for 2021 to $12.50-$13.50 per share from its prior view of $11.00-$11.50 per share.
Celanese is gaining from its productivity actions, investments in high-return organic projects and strategic acquisitions. The company is also seeing a recovery in demand across most of its end markets. It is witnessing higher demand in automotive, industrial and electronics applications.
The company remains committed to execute its productivity programs that include the implementation of a number of cost reduction capital projects. It achieved gross savings of $214 million from its productivity actions in 2020. Productivity actions are also expected to support to its margins in 2021.
Moreover, Celanese 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.
Celanese also continues to generate strong cash flows, lower debt levels and remains focused on returning value to its shareholders. The company, in January 2021, raised its quarterly cash dividend by 10% to 68 cents a share. Celanese also generated operating cash flow of $116 million in the first quarter. It also returned $328 million to shareholders through dividends and share repurchases during the quarter.
Earnings estimates for Celanese have also been going up over the past two months. The Zacks Consensus Estimate for the current year has increased around 27.8%. The consensus estimate for second-quarter 2021 has also been revised 62.7% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
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 Nucor Corporation (NUE - Free Report) , Dow Inc. (DOW - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .
Nucor has a projected earnings growth rate of 228.4% for the current year. The company’s shares have rallied around 151% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dow has a projected earnings growth rate of 261.5% for the current year. The company’s shares have shot up around 90% in a year. It currently sports a Zacks Rank #1.
Impala Platinum has an expected earnings growth rate of 225.2% for the current fiscal. The company’s shares have surged around 178% in the past year. It currently carries a Zacks Rank #2 (Buy).
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>