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Why Are Analysts Bullish on Celanese Stock?

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Analysts’ consensus on Celanese

After the second quarter of 2018, the number of analysts tracking Celanese (CE) stock declined from 20 to 19. About 74% of them have recommended a “buy” for the stock, while 21% have recommended a “hold,” and 5% have recommended a “sell.”

The overall analyst consensus recommendation for Celanese stock indicates a target price of $131.20 which implies a return potential of 15.7% over its closing price on September 18. In the past three months, analysts have increased CE’s target price from $125.50 to its current target price.

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CE reported strong second-quarter earnings with revenue growth of 22% and adjusted EPS of $2.90, beating Wall Street’s expectations. Analysts expect the strong performance to continue in the upcoming quarters. It could pass on the increase in raw materials prices to its clients with an increase in product prices. It has obtained four new patents for Sunett sweetener. As a result, most of the analysts continue to be bullish on the stock.

Individual brokerage recommendations

  • Barclays (BCS) raised its target price for Celanese from $140 to $145, implying a return potential of 27.8% over its closing price of $113.46 on September 18.
  • Deutsche Bank (DB) increased CE’s target price to $130 from $126, which implies a return potential of 14.6% over its closing price on September 18.
  • Morgan Stanley (MS) raised its target price for Celanese to $120, which implies a return potential of 5.8% over its closing price of $113.46 on September 18.

Investors can indirectly hold Celanese by investing in the iShares U.S. Basic Materials ETF (IYM), which has invested 2.5% of its portfolio in Celanese as of September 18.

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