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On Monday, BofA Securities adjusted its outlook on Celanese Corporation (NYSE:CE), a global chemical and specialty materials company, by reducing its price target from $88.00 to $72.00. Despite this change, the firm maintained its Buy rating on the company’s stock. The revision follows a period of underwhelming earnings reports and forecasts from Celanese, which has led analysts to lower their earnings expectations and price objective for the company. According to InvestingPro data, the stock has fallen over 64% in the past year and is currently trading near its 52-week low of $51.24, with eight analysts recently revising their earnings estimates downward.
The analysts at BofA Securities expressed continued support for Celanese, suggesting that the final quarter of 2024 and the first quarter of 2025 could represent the lowest point in the company’s earnings. They anticipate an improvement in EBITDA beyond this period, although they project it will remain below the levels seen in 2023-24. The firm’s analysis indicates that while margins for China’s acetyl products may stay low, they are not expected to decline further. InvestingPro analysis shows that while the company reported negative earnings in the last twelve months, analysts expect a return to profitability this year, with an EPS forecast of $5.57 for FY2025.
The global construction sector is facing challenges, but the analysts believe that the industry is more likely to experience growth than further decline. Additionally, auto production is predicted to remain steady compared to 2024, with potential for growth in the coming years, especially in the United States. Celanese is also increasing its efforts to expand into the electric vehicle (EV) market.
Celanese has implemented cost-saving programs that are proving to be beneficial, and BofA Securities anticipates that the company will announce additional measures. The analysts also addressed concerns regarding Celanese’s balance sheet. They argue that despite the stock being negatively impacted by these worries, the risk of the company needing to raise equity is low, citing the credit market’s potential interest in Celanese’s debt as a mitigating factor. InvestingPro data reveals the company maintains a current ratio of 1.34 and has demonstrated strong dividend consistency, maintaining payments for 21 consecutive years. For deeper insights into Celanese’s financial health and valuation metrics, including exclusive ProTips and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, Celanese Corporation reported its Q1 2025 earnings, revealing an earnings per share (EPS) of $1.45, which exceeded analyst expectations of $1.25. However, the company’s revenue fell short at $2.37 billion against a forecast of $2.39 billion. Despite the earnings beat, Celanese’s stock experienced a significant drop in after-hours trading. Analyst firms have been adjusting their outlooks for Celanese, with UBS, RBC Capital Markets, BMO Capital Markets, and Jefferies all reducing their price targets for the company. UBS cut its price target to $60, maintaining a Neutral rating, while RBC downgraded the stock from Outperform to Sector Perform, setting a new target of $56. BMO lowered its target to $46 and retained an Underperform rating, citing macroeconomic headwinds and increased capacity concerns. Jefferies also adjusted its target to $55, maintaining a Hold rating despite Celanese’s better-than-expected fourth-quarter earnings. These developments reflect ongoing challenges in the automotive sector and Celanese’s financial leverage, which analysts are closely monitoring.
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