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Celanese's (CE) Stock Up 31% in 6 Months: What's Driving It?

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Zacks Equity Research
·4 min read
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Shares of Celanese Corporation CE have gained 30.9% in the past six months. The company has also outperformed the industry’s rise of 18% over the same time frame. The stock also topped the S&P 500’s 17.8% rise over the same period.

Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock’s price performance.

What’s Aiding the Stock?

Celanese is gaining from its productivity actions, investments in high-return organic projects and strategic acquisitions. The company is also seeing a recovery in demand across most of its end markets. It witnessed a strong rebound in demand in automotive and electronics end markets in the fourth quarter of 2020.

The company remains committed to execute its productivity programs that include the implementation of a number of cost reduction capital projects. It achieved gross savings of $214 million from its productivity actions in 2020. Productivity actions are also expected to support to its margins in 2021.

Moreover, Celanese 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.

Celanese, last month, also raised its full-year 2021 outlook for adjusted earnings to $11.00-$11.50 per share. The midpoint of the latest guidance range reflects a 15% increase from the earlier range of $9.50-$10.00.

The company also expects adjusted earnings of roughly $3 per share for the first quarter. It expects the momentum to continue in the middle of 2021 as increased demand for Acetyl Chain and Engineered Materials products is met.

Earnings estimates for Celanese have also been going up over the past two months. The Zacks Consensus Estimate for the current year has increased around 12.7%. The consensus estimate for first-quarter 2021 has also been revised 12.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Celanese Corporation Price and Consensus

Celanese Corporation Price and Consensus
Celanese Corporation Price and Consensus

Celanese Corporation price-consensus-chart | Celanese Corporation Quote

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation NUE, Fortescue Metals Group Limited FSUGY and Impala Platinum Holdings Limited IMPUY.

Nucor has a projected earnings growth rate of 135.3% for the current year. The company’s shares have rallied around 107% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have shot up around 125% in a year. It currently sports a Zacks Rank #1.

Impala Platinum has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have surged around 236% in the past year. It currently carries a Zacks Rank #1.

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