Analyst Note| Seth Goldstein, CFA |
Celanese delivered a strong start to the year, as adjusted EBIT was up over 60% year on year during the quarter. The gains were driven by higher volumes and prices in the engineered materials and acetyl chain segments, partially offset by lower volumes in the acetate tow business. Management raised its guidance for the year to an adjusted EPS midpoint of $13, up from the $11.25 midpoint announced at the company's investor day in March. In light of the first-quarter results, we think the revised guidance is achievable and have increased our near-term outlook for the company. After updating our model to reflect this outlook, we raise our fair value estimate to $135 per share from $125. Our narrow moat rating is unchanged.