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Celanese (CE) Up 23% in 3 Months: What's Driving the Stock?
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Celanese Corporation’s (CE - Free Report) shares have surged 22.9% over the past three months. The company has also outperformed its industry’s rise of 1.4% over the same time frame. It has also topped the S&P 500’s 1.8% rise over the same period.
Let’s dive into the factors behind this leading chemical and specialty materials maker’s stock price appreciation.
Image Source: Zacks Investment Research
What’s Favoring CE?
Celanese, a Zacks Rank #3 (Hold) stock, is benefiting from its cost and productivity actions, investments in high-return organic projects and synergies of acquisitions.
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.
The acquisition of the majority of DuPont’s Mobility & Materials (“M&M”) business also enables Celanese to enhance its growth in high-value applications. It expects to achieve run-rate cost and revenue synergies of more than $500 million from the acquisition.
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.
The company also continues to generate strong cash flows and is focused on boosting shareholders’ value. It returned $73 million to shareholders through dividend payouts during the third quarter of 2022.
Celanese, in its third-quarter call, said that it expects to generate $1.5 billion or more in free cash flow in 2023, factoring in the contributions from the M&M acquisition. It also expects to pay roughly $300 million in dividends in 2023.
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Commercial Metals Company (CMC - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 26% in a year.
Sociedad has a projected earnings growth rate of 553.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 3.6% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 57% in a year. The company currently carries a Zacks Rank #1.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 38% in a year.
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Celanese (CE) Up 23% in 3 Months: What's Driving the Stock?
Celanese Corporation’s (CE - Free Report) shares have surged 22.9% over the past three months. The company has also outperformed its industry’s rise of 1.4% over the same time frame. It has also topped the S&P 500’s 1.8% rise over the same period.
Let’s dive into the factors behind this leading chemical and specialty materials maker’s stock price appreciation.
Image Source: Zacks Investment Research
What’s Favoring CE?
Celanese, a Zacks Rank #3 (Hold) stock, is benefiting from its cost and productivity actions, investments in high-return organic projects and synergies of acquisitions.
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.
The acquisition of the majority of DuPont’s Mobility & Materials (“M&M”) business also enables Celanese to enhance its growth in high-value applications. It expects to achieve run-rate cost and revenue synergies of more than $500 million from the acquisition.
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.
The company also continues to generate strong cash flows and is focused on boosting shareholders’ value. It returned $73 million to shareholders through dividend payouts during the third quarter of 2022.
Celanese, in its third-quarter call, said that it expects to generate $1.5 billion or more in free cash flow in 2023, factoring in the contributions from the M&M acquisition. It also expects to pay roughly $300 million in dividends in 2023.
Celanese Corporation Price and Consensus
Celanese Corporation price-consensus-chart | Celanese Corporation Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Commercial Metals Company (CMC - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 26% in a year.
Sociedad has a projected earnings growth rate of 553.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 3.6% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 57% in a year. The company currently carries a Zacks Rank #1.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 38% in a year.