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Investing.com - RBC Capital has lowered its price target on Celanese (NYSE:CE) to $45.00 from $63.00 while maintaining a Sector Perform rating on the stock. The chemical company’s shares, currently trading at $41.82, have declined significantly, with a 66.5% drop over the past year. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value assessment.
The firm cited weak near-term volume and production issues affecting the chemical company’s earnings outlook, which points to a material decrease of approximately 24% year-over-year in the third quarter of 2025. InvestingPro data reveals that 12 analysts have recently revised their earnings downwards for the upcoming period, though the company is still expected to return to profitability this year.
RBC identified several factors impacting Celanese’s performance, including inventory management at customers, weak automotive production (especially in Europe), and tow destocking, which are affecting earnings and the company’s ability to realize volume-dependent M&M integration benefits.
Despite management establishing a path to approximately $2 per share quarterly earnings through self-help measures, including cost reductions of about $120 million in fiscal year 2025 and $50-100 million in fiscal year 2026, RBC remains cautious on material earnings improvement until demand strengthens.
The firm has reduced its EBITDA estimates for Celanese to $500 million for Q3, $1.9 billion for FY25, and $1.98 billion for FY26, down from previous estimates of $553 million, $1.975 billion, and $2.2 billion respectively, while maintaining its 7.5x FY26 multiple.
In other recent news, Celanese Corporation reported second-quarter earnings for 2025 that exceeded analyst forecasts. The company achieved an earnings per share (EPS) of $1.44, surpassing the expected $1.40, while revenue reached $2.53 billion, above the anticipated $2.5 billion. Despite these positive results, Celanese faces challenges with demand, as highlighted by several analyst firms. BMO Capital lowered its price target for Celanese to $47, citing pressures in business segments and weakness in key markets such as China and Europe. KeyBanc also reduced its price target to $70, noting a significant drop in demand and limited future visibility, although the firm maintained an Overweight rating due to effective cost management. BofA Securities adjusted its price target to $59, pointing to deteriorating demand and shortened order books. CFRA further decreased its price target to $30, expressing concerns over Celanese’s high debt levels and ongoing margin contraction. These developments indicate that while Celanese has performed well financially, it continues to navigate significant market challenges.
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