How Steep Losses and Lanaken Closure at Celanese (CE) Have Changed Its Investment Story

• Celanese Corporation recently reported third-quarter earnings, disclosing sales of US$2,419 million and a net loss of US$1.36 billion compared to net income of US$113 million in the same period last year.
• The earnings release followed news of Celanese’s intention to close its acetate tow facility in Lanaken, reflecting broader cost optimization efforts in response to ongoing demand and regulatory pressures.
• We'll explore how the significant net loss and site closure reshape Celanese's investment outlook and its pursuit of long-term resilience.

Find companies with promising cash flow potential yet trading below their fair value.

Celanese Investment Narrative Recap

Celanese shareholders typically believe in the company’s ability to drive long-term value through operational efficiency, cost control, and market leadership in acetyl and engineered materials. However, the recent US$1.36 billion net loss and the planned acetate tow plant closure bring renewed attention to the immediate risk of prolonged weak demand and overcapacity, challenging the most important short-term catalyst: a meaningful recovery in volumes and margins. The impact of these events on that catalyst is material, as they highlight both operational challenges and the need for lower costs to offset a tough demand setting.

The announcement regarding the Lanaken acetate tow facility closure stands out, signaling Celanese’s ongoing cost optimization efforts amid tough industry conditions. Given the scale of the loss and the strategic rationale to rationalize operations, this move is directly linked to the company’s efforts to restore profitability and better position itself for an eventual demand rebound. However, it also underscores the uncertainty that can arise as companies rely more heavily on internal restructuring while top-line pressure continues.

In contrast, investors should be especially mindful of...

Read the full narrative on Celanese (it's free!)

Celanese's narrative projects $10.2 billion revenue and $799.9 million earnings by 2028. This requires a 1.0% annual revenue decline and a $2.4 billion increase in earnings from current earnings of -$1.6 billion.

Uncover how Celanese's forecasts yield a $53.69 fair value, a 49% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community for Celanese range from US$50 to US$106.87 per share. With cost optimization actions now even more urgent, consider how differing confidence in a volume recovery shapes opinions on the company’s outlook.

Explore 8 other fair value estimates on Celanese - why the stock might be worth over 2x more than the current price!

Build Your Own Celanese Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Celanese research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Celanese's overall financial health at a glance.

Ready For A Different Approach?

Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters:

• The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• Explore 28 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research.
• These 12 companies survived and thrived after COVID and have the right ingredients to survive Trump's tariffs. Discover why before your portfolio feels the trade war pinch.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com