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Celanese (CE) Soars 6%: Is Further Upside Left in the Stock?

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Celanese (CE - Free Report) shares rallied 6% in the last trading session to close at $127.57. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 22.8% loss over the past four weeks.

Strong end-market demand and upbeat prospects stemming from strategic acquisitions seemed to have driven the stock higher. Celanese is benefiting from its cost and productivity actions, investments in high-return organic projects and synergies of acquisitions. The company is gaining from higher demand in most of its end markets. The acquisition of the majority of DuPont’s Mobility & Materials segment will also enhance its growth in high-value applications. The purchase of Exxon Mobil's Santoprene business also broadens the company’s portfolio of engineered solutions.

This chemical company is expected to post quarterly earnings of $4.55 per share in its upcoming report, which represents a year-over-year change of -9.4%. Revenues are expected to be $2.45 billion, up 11.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Celanese, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Celanese is a member of the Zacks Chemical - Specialty industry. One other stock in the same industry, Zymergen (ZY - Free Report) , finished the last trading session 4.2% higher at $1.50. ZY has returned 24.1% over the past month.

For Zymergen, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.75. This represents a change of +42.3% from what the company reported a year ago. Zymergen currently has a Zacks Rank of #3 (Hold).


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