Celanese Corporation Faces Financial Headwinds Ahead of Q4 Earnings Report
Celanese Corporation (CE), based in Irving, Texas, specializes in high-performance engineered polymers. With a market capitalization of $8 billion, this global leader develops specialty polymers for various industries—including paints, adhesives, and pharmaceuticals. They also produce items like vinyl acetate emulsions, ethylene vinyl acetate resins, and redispersible powders for construction. The company is expected to release its fourth-quarter earnings for fiscal 2024 on Tuesday, February 18, after market close.
Profit Expectations Show Decline
Analysts anticipate that CE will report a profit of $1.20 per share on a diluted basis for the upcoming quarter, a significant decrease of 46.4% compared to $2.24 per share from the same time last year. Over the last four quarters, CE has missed consensus estimates three times but managed to surpass expectations once.
Annual Earnings Projections Reflect Challenges
For the entire fiscal year, projections suggest CE will report an earnings per share (EPS) of $8.11, down from $8.92 in fiscal 2023—a decline of 9.1%. However, EPS is forecasted to rebound with an 8.4% increase, reaching $8.79 in fiscal 2025.
Stock Performance Falls Behind Market
CE stock has not performed well compared to the S&P 500, which has gained 25.8% over the past year. In contrast, Celanese’s shares have dropped by 49.6%. The Materials Select Sector SPDR Fund (XLB) has also outperformed CE with a gain of 7.8% in the same period.
Challenges Yield Underperformance
Several factors have contributed to CE’s struggles, including a dividend cut, broader macroeconomic issues, and decreased demand and production in the automotive and industrial sectors. Additionally, weakened demand in crucial markets like paints and construction, alongside a slowdown in China, has intensified the company’s performance challenges.
On November 4, CE announced its Q3 earnings, and the stock took a significant hit, falling over 26% the following trading day. The company reported an adjusted EPS of $2.44, which fell short of Wall Street’s expectations of $2.84. Revenue for the quarter was reported at $2.65 billion, also below the forecasted $2.68 billion. Looking ahead to Q4, CE expects adjusted EPS to reach $1.25.
Analysts’ Perspectives on CE Stock
Analyst sentiment regarding CE stock remains cautious, reflected in a general “Hold” rating. Among 17 analysts monitoring the stock, three recommend a “Strong Buy,” one suggests a “Moderate Buy,” ten assign a “Hold,” and three advise a “Strong Sell.” Currently, the average price target for CE from analysts is $89.50, indicating a potential upside of 21.4% from its present levels.
On the date of publication, Neha Panjwani did not hold any positions in the securities mentioned in this article. This article is intended solely for informational purposes. For more details, refer to the Barchart Disclosure Policy here.
The views expressed in this article represent those of the author and do not necessarily reflect the views of Nasdaq, Inc.
