On Wednesday, Mizuho (NYSE:MFG) Securities adjusted their outlook on Celanese Corporation (NYSE:CE), a global chemical and specialty materials company, by reducing the price target from $86.00 to $73.00. The firm sustained its Neutral rating on the stock. According to InvestingPro data, analyst targets for CE range from $70 to $150, while the stock has declined 45.8% over the past six months. The revision followed Celanese’s guidance for the first quarter of 2025, which indicated an expected EBIT midpoint of $213 million, significantly lower than the $366 million and $347 million previously estimated by MSUSA and Bloomberg consensus, respectively. Additionally, the anticipated adjusted earnings per share (EPS) midpoint for the quarter is $0.35, compared to the $1.79 and $1.63 forecasted by MSUSA and consensus. InvestingPro analysis reveals that 6 analysts have recently revised their earnings downward for the upcoming period, though the company is expected to return to profitability this year.
Celanese’s guidance for the second quarter of 2025 suggests an approximate $1 per share increase in EPS compared to the first quarter, attributing the rise to seasonal factors and the absence of temporary items that impacted previous results. Despite this, the company’s CEO highlighted "early signs point to weak demand continuing through the first half of 2025."
The company’s performance in the fourth quarter of 2024 was also addressed, with reported adjusted EBIT at $333 million, surpassing the $320 million and $293 million estimated by MSUSA and consensus. However, EBITDA for the same quarter saw a 20% quarter-over-quarter decline, with a 7% drop in volume.
Amidst these financial updates, Celanese has also undergone executive changes, appointing the former CFO as the new CEO and reintroducing former executives Todd Elliott as the new head of Engineered Materials and Scott Sutton to the board.
The firm’s decision to maintain a Neutral rating while lowering the price target to $73 reflects the mixed financial outlook and executive reshuffling within Celanese, as well as the broader concerns about ongoing weak demand in the industry. Despite current challenges, InvestingPro analysis indicates the company maintains a "GOOD" overall financial health score, with particularly strong marks in profit and relative value metrics. For deeper insights into Celanese’s valuation and prospects, investors can access the comprehensive Pro Research Report, which provides detailed analysis of the company’s fundamentals and growth potential.
In other recent news, Celanese Corporation, a chemical and specialty materials company, provided first quarter earnings guidance that fell short of analyst expectations, causing a significant decrease in share value. The company reported fourth quarter adjusted earnings per share of $1.45, surpassing the analyst consensus of $1.25, and revenue of $2.37 billion, which was slightly below estimates of $2.39 billion. However, the outlook for the first quarter was notably lower than anticipated, with earnings per share expected to be between $0.25 and $0.50, as opposed to the predicted $1.65.
Celanese’s CEO, Scott Richardson, identified continued weakness in key end markets, such as automotive, construction, paints, coatings, and industrial, as challenges for the company. He also noted additional difficulties from seasonality in certain businesses and a planned facility outage. Despite these setbacks, the company aims to mitigate these headwinds through various measures.
For the full year 2024, Celanese reported net sales of $10.3 billion, a 6% decrease YoY, and an operating loss of $697 million, a stark contrast to the operating profit of $1.69 billion in 2023. Looking ahead, the company projects a sequential improvement in the second quarter, with earnings per share expected to be approximately $1.00 higher than Q1 levels. As part of its strategy to navigate the challenging environment, Celanese has implemented cost reductions and growth initiatives, including actions to exceed $75 million in targeted cost cuts for 2025 and plans to close a manufacturing facility in Luxembourg. These are recent developments in the company’s operations.
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