UPDATE: Bank of America Merrill Lynch Reiterates Neutral Rating, Lowers PO on Celanese Corporation
In a report published Monday, Bank of America Merrill Lynch reiterated its Neutral rating on Celanese Corporation (NYSE: CE), but lowered its price objective from $48.00 to $46.00.
BofA Merrill Lynch noted, “We attended Celanese's Technology Day in Houston, where the company highlighted its TCX ethanol technology and various new product initiatives. In our view, the event revealed more about Celanese's strategic path under new CEO Mark Rohr than it did about incremental specifics of the company's acetyls or TCX ethanol manufacturing technology. Our key takeaways are: (1) portfolio mix is likely to tilt toward advantaged commodities over time; (2) sales and assets are likely to shift further toward Asia; and (3) financial posture is more conservative...We trim our 2012 EPS estimate by $0.20 to $3.80 with a new PO of $46 down from $48. Positives are: (1) upside from green field ethanol plants in Asia for 2016+, subject to receipt of permits; (2) low-cost acetyls production with a good industry structure; (3) value in JVs; and (4) growing demand for engineering plastics. However, lackluster trends in acetyls, financial leverage, pension status, and a modest dividend yield pose risks in our view.”
Celanese Corporation closed on Friday at $40.00.
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