Celanese (CE) Valuation Revisited After New Carbon Footprint Certification for Low-Carbon POM ECO-C Products

Celanese (CE) just added another credential to its sustainability pitch, securing Carbon Footprint Certification for its POM ECO C grades in Germany and Texas after investing heavily in carbon capture based methanol production.

See our latest analysis for Celanese.

Even with this sustainability milestone, Celanese’s 30 day share price return of 11.71 percent sits against a much weaker year to date share price return of minus 36.42 percent. This mirrors a three year total shareholder return of minus 55.12 percent, so recent momentum looks more like a tentative rebound than a full turnaround.

If this kind of transition story has your attention, it might be worth scanning auto manufacturers to see how downstream customers exposed to lightweight and engineered materials are positioned for the next leg of the cycle.

With revenues edging higher but profits still in the red, and the share price trading at a steep discount to both analyst targets and intrinsic value estimates, is Celanese a contrarian opportunity or is the market correctly discounting its future growth?

Most Popular Narrative: 17.1% Undervalued

With Celanese last closing at $43.50 against a narrative fair value of about $52.50, the valuation argument focuses on earnings recovery and margin rebuild.

The company maintains substantial earnings power and cash generation ability even at depressed volume levels; any macro catalysts (industrial recovery, normalization of construction cycles, onshoring of manufacturing) are likely to drive disproportionate improvements in revenue and margin due to the company's advantaged cost structure and operational flexibility.

Read the complete narrative.

Want to see how modest top line growth, sharply improving margins, and a lower than sector earnings multiple still add up to a higher fair value? Explore the details below.

Result: Fair Value of $52.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, prolonged overcapacity in key chemical markets and elevated debt servicing costs could easily delay, or even derail, the anticipated margin recovery.

Find out about the key risks to this Celanese narrative.

Build Your Own Celanese Narrative

If this view does not quite align with your own, or you would rather dig into the numbers yourself, you can build a custom thesis in minutes: Do it your way.

A great starting point for your Celanese research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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