Celanese (CE) Up 57% in 6 Months: What's Driving the Stock?

Shares of Celanese Corporation CE have shot up 57.2% over the past six months. The company has also outperformed its industry’s decline of 18.8% over the same time frame. It has also topped the S&P 500’s 21% rise over the same period.

Celanese, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $15.7 billion and average volume of shares traded in the last three months is around 794.5K.

 

 

Let’s take a look into the factors that are driving the stock’s price appreciation.

What’s Aiding the Stock?

Forecast-topping earnings performance in the third quarter has contributed to the rally in the company's shares. Its adjusted earnings of $1.95 per share for the third quarter trounced the Zacks Consensus Estimate of $1.69. Celanese gained from strong demand recovery in the quarter.

The company, in October, stated that global demand during the third quarter progressed toward recovery across most of its end markets. It expects the momentum it witnessed in the third quarter to continue in the fourth quarter. The company remains focused on controllable actions to drive strong growth next year amid uncertainties.

Celanese is gaining from its productivity actions, investments in high-return organic projects and strategic acquisitions. It remains committed to execute its productivity programs that include the implementation of a number of cost reduction capital projects. The company expects to achieve gross savings of $200 million from its productivity actions in 2020. Notably, the company has already attained $166 million of this productivity target. Productivity actions are expected to lend support to its margins in 2020.

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 this year.

 

Celanese Corporation Price and Consensus

 

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 New Gold Inc. NGD, Barrick Gold Corporation GOLD and Pretium Resources Inc. PVG.

New Gold has a projected earnings growth rate of 100% for the current year. The company’s shares have rallied around 121% in a year. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barrick Gold has an expected earnings growth rate of 115.7% for the current year. The company’s shares have surged around 42% in the past year. It currently carries a Zacks Rank #2.

Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 15% in the past year. It currently carries a Zacks Rank #2.

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