Celanese (CE) Up 24% in 6 Months: What's Driving the Stock?
Celanese Corporation’s CE shares have popped 23.7% over the past six months. The company has also outperformed its industry’s rise of 17.5% over the same time frame. It has also topped the S&P 500’s 14.9% 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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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 is actively pursuing 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.
The acquisition of the majority of DuPont’s Mobility & Materials (“M&M”) business also enables Celanese to enhance its growth in high-value applications. CE, in its fourth-quarter call, said that it expects an upward trend in its quarterly earnings through 2023, backed by improvement in demand and the realization of synergies from the M&M 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 in 2023.
The company also continues to generate strong cash flows and is focused on boosting shareholders’ value. It generated operating cash flow of $1.8 billion and free cash flow of $1.3 billion in 2022. Celanese also returned $297 million to shareholders through dividend payouts during 2022.
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 Steel Dynamics, Inc. STLD, Olympic Steel, Inc. ZEUS and Linde plc LIN.
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 32.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has gained around 21% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 33.1% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 32% in a year.
Linde currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 2.5% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 13% in the past year.
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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
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