UBS Downgrades Celanese Corp On Valuation, Expects Tough Comps Ahead

In a report published Monday, UBS analyst John Roberts downgraded the rating on

from Buy to Neutral, while raising the price target from $69 to $74. The analyst believes that the stock is fully valued at present, with limited upside, going forward, based on the company's fundamentals. Following the announcement of Celanese's 1Q15 results in April, the stock shot up 16 percent in one day, given the better than anticipated results, as well as speculations regarding potential split of the company. "The continued gains in CE stock mat reflect continuing discussion about a potential split," Roberts said, while mentioning that the speculations were fanned by the management presenting the company's portfolio along two separate groups. "In our view, the probability of a split is small," Roberts added. "We believe cigarette tow (filter fiber) comps will remain tough until 1Q16 as inventory destocking comes to an end. Methanol self-sufficiency isn't realized until mid to late 2016 once the new plant comes online and fully ramps," the UBS report stated. The analyst expects Celanese to see EPS acceleration towards the beginning of 2H16.