Credit Suisse Lowers Price Target On Celanese On Attractive Risk/Reward

In a report published Monday, Credit Suisse analyst John P. McNulty reiterated an Outperform rating on

, but lowered the price target from $73.00 to $70.00. In the report, Credit Suisse noted, “Following CE's 4Q earnings, which beat our/street expectations (for the 6th straight quarter in a row) but also weak guide, we are reducing our 2015 EPS estimate to $5.36 (from $5.61) owing to: FX – we assume a 1.10 EUR/USD rate for all of 2015 (vs. 1.22 previously) and lower earnings in Consumer Specialties given customer destocking and a $12 mil hit from China tax holiday ending (estimate ~$60 mil combined impact). Our estimate is towards the higher-end of mgmt's guidance ($5.00-5.50) which we believe will prove conservative given: 1) potential raw material benefits (CE called out $100 mil of potential benefit from lower raw material costs but only included a very small portion in their guidance, leaving room for upside), 2) share repurchases – CE's guidance assumes nothing for share repurchases despite the $199 mil remaining authorization, 3) lower methanol prices – if methanol prices continue to decline, there is upside to our numbers and CE's guidance (we assume a $54 mil hit in 3Q15 from the advantaged contract rolling off) and 4) better growth in European autos/macro given the FX moves. We are reducing our Price Target to $70 (from $73) given the lower estimates.” Celanese closed on Friday at $53.65.