Celanese Corporation Sees Significant Stock Decline Amid Industry Challenges

Irving, Texas-based Celanese Corporation (CE) stands as a notable player in the global chemical landscape. The company specializes in high-performance engineered polymers, chemicals, and specialty materials. With a market capitalization of $6.5 billion, Celanese operates through two main segments: Engineered Materials and Acetyl Chain.

Generally, companies with a valuation of $2 billion or more are classified as “mid-cap stocks,” placing Celanese in this category due to its substantial market cap that underscores its relevance in the chemical sector.

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Celanese Stock Performance and Recent Trends

Despite its stature, Celanese’s stock has dropped significantly, achieving a decline of 65.6% from its three-year high of $172.16 reached on March 8, 2024. Furthermore, the stock has suffered a 14.5% decrease in the past three months, notably lagging behind the Materials Select Sector SPDR Fund’s (XLB) modest gain of 1.5% during the same period.

The outlook for Celanese has not improved over the longer term. The stock has plummeted 57.7% over the last six months and 64.5% over the past year. In comparison, the XLB index saw a 10.7% dip and a 5.1% decline, respectively, indicating a significant underperformance from Celanese.

Moving Averages and Price Fluctuations

To reinforce the prevailing bearish sentiment, Celanese has consistently traded below its 50-day moving average since mid-May 2024 and below its 200-day moving average since mid-June 2024, with occasional fluctuations.

Impact of Disappointing Financial Results

After reporting disappointing Q4 results on February 18, Celanese’s stock plunged by 21.5% during the trading session. The company’s sales across critical sectors, including paints & coatings, automotive, and construction, have been negatively impacted by ongoing demand softness. Notably, sales from Celanese’s engineered materials division saw a considerable decline, contributing to a 7.7% year-over-year decrease in overall net sales to about $2.4 billion.

Profitability was also affected, as the company reported a staggering 23.3% year-over-year decline in adjusted EBIT, falling to $333 million. Additionally, even with reduced capital expenditures, free cash flows dropped by 45.7% year-over-year to $381 million, shaking investor confidence.

Comparison with Peers and Analyst Consensus

In comparison, Celanese has also underperformed relative to peer Olin Corporation (OLN), which experienced a significant decline of 49% over the past six months and 56.7% over the past year.

Among the 17 analysts monitoring CE stock, the consensus rating is “Hold,” with a mean price target of $61.53, indicating a modest 4% premium to current price levels.

On the date of publication, Aditya Sarawgi did not hold positions in any of the securities mentioned. All information is for informational purposes only. For more details, see the Barchart Disclosure Policy here.

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The views expressed herein are the author’s and do not necessarily reflect those of Nasdaq, Inc.