This materials company just beat earnings estimates by $0.18 per share, posting $1.61 EPS. It’s expected to grow at a double-digit rate for the next couple of years, and also has a dividend yield of 1.7%.
Celanese (CE)
from Ford Equity Research Report
We project that Celanese (CE) will strongly outperform the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement.
Celanese is a technology and specialty materials company that engineers and manufactures a variety of products for everyday living. The company is a producer of engineered polymers and acetyl products. The company’s product portfolio serves a range of end-use applications including paints and coatings, textiles, automotive applications, consumer and medical applications, performance industrial applications, filter media, paper and packaging, chemical additives, construction, consumer and industrial adhesives, and food and beverage applications.
Celanese operates principally through four business segments: Advanced Engineered Materials, Consumer Specialties, Industrial Specialties and Acetyl Intermediates.
The company has generated a negative trend in earnings per share over the past 5 quarters and while recent estimates for the company have been raised by analysts, CE has posted better than expected results. Based on operating earnings yield, the company is undervalued when compared to all of the companies we cover. Share price changes over the past year indicate that CE will perform in line with the market over the near term.
While Celanese Corp.'s earnings have increased from $3.91 to an estimated $5.74 over the past 5 quarters, they have shown deceleration in quarterly growth rates when adjusted for the volatility of earnings. This is an indication of weakness that could lead to declining earnings. Earnings forecasts for Celanese Corp. have been increasing which indicates an improvement in future earnings growth. The company has also reported higher earnings than those predicted in earlier estimates. This indicates an ability to exceed analysts’ expectations and the potential for improving earnings growth in the future.
Celanese Corp.'s operating earnings yield of 9.8% ranks above 94% of the other companies in the Ford universe of stocks, indicating that it is undervalued.
Celanese Corp.'s stock price is up 4.9% in the last 12 months, up 0.9% in the past quarter and up 0.4% in the past month. This historical performance should lead to average price performance in the next one to three months.
Richard Segarra, CFA, Ford Equity Research Report, www.fordequity.com, 800-842-0207, October 31, 2014