Celanese Poised For Growth In Global Manufacturing Recovery And Organic Opportunities: Analyst

KeyBanc Capital Markets analyst Aleksey Yefremov upgraded Celanese Corp CE to Overweight from Sector Weight with a price target of $149.

The analyst thinks the company 'is a compelling way' to play global manufacturing economic stabilization and recovery. 

The analyst expects the company's attention to shift to organic growth opportunities in Engineered Materials and the highly cash-generative Acetyls franchise.

The analyst notes CE's debt refinancing has meaningfully lowered the risk-related maturities in 2023-2025 and expects the company to generate enough FCF to cover maturities over the next +2 years.

Yefremov revised FY23 EBITDA and EPS estimates to $2,474.8 million (from $2,455.5 million) vs. consensus of $2,521.8 million and $8.46 (from $8.79) vs. consensus of $9.23, respectively.

Also, the analyst updated the FY24 EBITDA and EPS estimates to $2,951.4 million (from $2,951.6 million) vs. consensus of $2,890.3 million and $12.85 (from $13.36) vs. $12.60 estimate.

Yefremov expects earnings to improve on lower destocking, $0.75-$1.00 of unabsorbed fixed cost recovery in FY24, lower interest expense of $1.00-$1.20 of EPS in FY24, and M&M acquisition synergies. 

The analyst expects industry capacity utilization to rise to healthy levels in 2025 and beyond.

Also Read: Celanese's $1B Debt Paydown Possible On Shutting Food Ingredients JV, Working Capital Reduction: Analyst

Price Action: CE shares are trading higher by 0.45% at $126.92 on the last check Wednesday.