Earnings Beat: Celanese Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, Celanese Corporation (NYSE:CE) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 4.7% to hit US$1.4b. Celanese reported statutory earnings per share (EPS) US$1.75, which was a notable 12% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Celanese

Taking into account the latest results, the most recent consensus for Celanese from 15 analysts is for revenues of US$5.93b in 2021 which, if met, would be a satisfactory 7.8% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 77% to US$8.74. Before this earnings report, the analysts had been forecasting revenues of US$5.86b and earnings per share (EPS) of US$8.74 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$122, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Celanese at US$140 per share, while the most bearish prices it at US$95.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Celanese's rate of growth is expected to accelerate meaningfully, with the forecast 7.8% revenue growth noticeably faster than its historical growth of 2.8%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Celanese to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$122, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Celanese going out to 2022, and you can see them free on our platform here.

Even so, be aware that Celanese is showing 1 warning sign in our investment analysis , you should know about...

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