Celanese Corporation’s (CE Quick QuoteCE - Free Report) shares have popped 21.2% over the past three months. The company has also outperformed its industry’s rise of 13% over the same time frame. It has also topped the S&P 500’s 10.5% rise over the same period.

Let’s dive into the factors behind this leading chemical and specialty materials maker’s stock price appreciation.

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CE Gains on Acquisitions & Productivity

Celanese, a Zacks Rank #3 (Hold) stock, is benefiting from its productivity measures, investments in organic projects and strategic acquisitions amid headwinds from demand softness and customer de-stocking in certain end markets.

Acquisitions have provided CE with the opportunities for additional growth, investment and synergies. The buyout of the majority of DuPont’s Mobility & Materials (“M&M”) business has allowed Celanese to enhance its growth in high-value applications. M&M contributed $125 million to the company’s operating EBITDA in third-quarter 2023, up 15% sequentially. Celanese sees a sequential increase in contribution in the fourth quarter.

Moreover, the purchase of Exxon Mobil's Santoprene business broadened 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. The acquisitions of SO.F.TER., Nilit and Omni Plastics are also 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.

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 is proactively implementing strategic initiatives recognizing the volatility and unpredictability of the current market landscape and competitive environment. These actions involve strengthening its commercial teams, aligning production and inventory levels with prevailing demand, implementing cost-saving measures, and optimizing cash flow. These endeavors are expected to result in robust cash generation and a continuation of earnings growth.

Celanese also continues to generate strong cash flows and is focused on boosting shareholders’ value. Cash provided by operating activities was $403 million and free cash flow was $268 million in the third quarter of 2023. CE also returned roughly $228 million to shareholders through dividend payouts during the first nine months of 2023. Moreover, the company reduced its net debt by $758 million in the third quarter.

Stocks to Consider

Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation (CCJ Quick QuoteCCJ - Free Report) , Carpenter Technology Corporation (CRS Quick QuoteCRS - Free Report) and The Andersons Inc. (ANDE Quick QuoteANDE - Free Report) .

Cameco has a projected earnings growth rate of 184% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 18.3% over the past 60 days. The stock has shot up around 99% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 51% in the past year.

Andersons currently carries a Zacks Rank #1. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have rallied 46% in the past year.