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Results: Celanese Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Simply Wall St
·4 min read

As you might know, Celanese Corporation (NYSE:CE) just kicked off its latest quarterly results with some very strong numbers. Celanese beat earnings, with revenues hitting US$1.4b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Celanese after the latest results.

See our latest analysis for Celanese

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Taking into account the latest results, the consensus forecast from Celanese's 15 analysts is for revenues of US$5.93b in 2021, which would reflect an okay 7.8% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 77% to US$8.74. Before this earnings report, the analysts had been forecasting revenues of US$5.86b and earnings per share (EPS) of US$8.74 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$122, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Celanese, with the most bullish analyst valuing it at US$140 and the most bearish at US$95.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Celanese's rate of growth is expected to accelerate meaningfully, with the forecast 7.8% revenue growth noticeably faster than its historical growth of 2.8%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Celanese is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$122, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Celanese. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Celanese analysts - going out to 2022, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Celanese that we have uncovered.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.