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Celanese (CE) to Increase Prices of GUR & GHR Products

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Celanese Corporation (CE - Free Report) has announced price rise for its engineered material GUR and GHR ultra-high molecular weight polyethylene (UHMW-PE) polymers. The price hike will be put into effect for all orders shipped on or after Jan 1, 2019, or as contracts permit.

The company will increase GUR and GHR grades prices by 10% in the Americas, euro 15 cents per kg in Europe and 15 cents per kg in Asia. However, the final price for individual grades may differ.

Celanese is taking appropriate pricing actions amid a volatile pricing environment for raw materials. The company’s measures, including operational cost savings through productivity actions and price hike initiatives, are likely to provide an impetus to its earnings in 2018.

In the past six months, Celanese has underperformed the industry it belongs to. The stock lost around 23.6% compared with the industry’s decline of 11.9%.

 


During the third-quarter earnings call, Celanese raised its adjusted earnings per share guidance for 2018 to roughly $10.90-$11.10, factoring in strength in Engineered Materials (EM) and Acetyl Chain units. The company expects the momentum in Acetyl Chain and EM to continue for the rest of 2018. The EM segment is expected to maintain the pace of earnings growth, with traction from new projects and bolt-on acquisitions.

This chemical maker benefited from gains in its EM and Acetyl Chain units in the third quarter. Higher pricing across these businesses also supported results.

However, Celanese saw lower pricing in the quarter at its Acetate Tow segment due to reduced industry capacity utilization, partly masked by mix and productivity gains.

Celanese Corporation Price and Consensus

 

Zacks Rank & Other Stocks to Consider

Celanese currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Israel Chemicals Ltd. (ICL - Free Report) , The Mosaic Company (MOS - Free Report) and Cameco Corporation (CCJ - Free Report) , each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Israel Chemicals has an expected earnings growth rate of 19.35% for the current year. The company’s shares have rallied 33.6% in the past year.

Mosaic has an expected earnings growth rate of 75.2% for the current year. The company’s shares have gained 23.9% in the past year.

Cameco has an expected earnings growth rate of 66.7% for the current year. The company’s shares have gained 13.9% in a year’s time.

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