Company Reports

Celanese reported solid second-quarter results, as higher prices in the commodity chemical business generated strong profit growth.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used to produce specialty engineered materials or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates a little less than half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost-advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should support segment margins as we expect prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

Celanese reported improved first-quarter results as operating profits were up year over year despite lower volumes and prices. Celanese shares were down 10% at the time of writing May 6 as the market reacted to reports the US and Iran were close to a deal to end the Middle East conflict.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used to produce specialty engineered materials or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates a little less than half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost-advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should support segment margins as we expect prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

The US and Iran agreed to a two-week ceasefire as part of a broader negotiation to end the conflict, which included Iran reopening the Strait of Hormuz to shipping traffic. US chemicals stocks Celanese, Dow, Eastman, and LyondellBasell were down 1% to 12% at the time of writing.

US chemicals producer stocks ranged from down 1% to up 2% at the time of writing on March 2, following the closure of the Strait of Hormuz and the news that QatarEnergy is temporarily shutting down its natural gas production.

Celanese's fourth-quarter earnings reflected weak end market demand as volume declines led to lower profits. Celanese shares were down slightly at the time of writing on Feb. 18 as the market reacted to management's outlook for earnings to come in below FactSet consensus estimates.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used to produce specialty enginnered materials or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates a little less than half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost-advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should support segment margins as we expect prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

Celanese's third-quarter earnings continued to exhibit a global slowdown in chemicals demand as profits were down versus the prior-year quarter. Celanese shares were up 13% at the time of writing Nov. 7 as the market reacted to improved free cash flow generation.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used to produce specialty enginnered materials or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates about half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost-advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should support segment margins as we expect prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

We've updated our midcycle Brent oil price assumption to $65 per Barrel from $60. Our long-term forecast marries our bullish in-house oil demand view with Rystad's supply projections.

Celanese's second-quarter results reflected a weakening end-market demand environment, as operating EBITDA was down 16% year over year. Celanese shares were down 12% at the time of writing as the market reacted to third-quarter guidance coming in well below FactSet consensus estimates.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used in the company’s specialized end products or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates about half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost-advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should support segment margins as we expect prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

Since the US announcement of global tariffs on April 2, US chemicals stocks vastly underperformed the Morningstar US Total Return Index and Morningstar US Basic Materials Index, even after the US and China announced tariff reductions on May 12.

Celanese reported a profit decline due to lower prices and volumes. Celanese shares were up 8% at the time of writing as management guided to second-quarter results to come in above consensus estimates.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used in the company’s specialized end products or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates about half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost-advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should benefit segment margins as we expect prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

President Trump announced sweeping tariffs that featured a minimum 10% tariff on all US imports, with only limited exceptions and higher rates for select countries. Most US-listed chemicals producers were down on the news.

Celanese shares were down 23% at the time of writing as the company's guidance implies a profit decline in 2025 and came in well below consensus estimates.

Celanese is the world's largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomer and emulsions. These products are used in the company’s specialized end products or sold externally. Celanese produces these commodity chemicals in its acetyl chain segment, which generates around half of companywide profits. This segment primarily serves the automotive, cigarette, coatings, building and construction, and medical end markets. Celanese's Clear Lake, Texas, plant benefits from a cost advantaged feedstock from low-cost US natural gas. The company has expanded its acetic acid production capacity at Clear Lake in recent years to take advantage of the low-cost US natural gas-based feedstock, while also reducing capacity in other higher-cost regions. This should benefit segment margins as we expect US natural gas prices to remain well below natural gas prices in Europe, Asia, and Brent oil-based feedstock.

Celanese announced that current COO Scott Richardson will become the next CEO, effective Jan. 1, 2025. Richardson will replace current CEO Lori Ryerkerk, who has led Celanese since 2019. We see no reason to change our ratings due to the CEO transition. Accordingly, we’re maintaining our $150 fair value estimate. Our narrow moat rating and Exemplary Capital Allocation Rating are also unchanged. At current prices, we view Celanese shares as materially undervalued, with the stock trading at less than half of our fair value estimate and in 5-star territory.