Bank of America Securities analyst Salvator Tiano reiterated a Buy rating on Celanese (CE – Research Report) today and set a price target of $72.00.
Salvator Tiano has given his Buy rating due to a combination of factors that suggest a brighter future for Celanese despite current challenges. He believes that the worst of the company’s earnings performance is now past, with expectations of improved EBITDA in the upcoming quarters, although it may not reach the levels seen in 2023-24. Tiano notes that while China’s acetyl margins remain low, they are not expected to decline further, and global construction challenges are likely to stabilize or improve. Additionally, with the potential for growth in auto production and Celanese’s strategic focus on the electric vehicle market, there are promising avenues for future growth.
Despite the soft demand impacting Celanese and its peers, Tiano sees potential for significant earnings improvements in the second and third quarters, driven by cost reductions and seasonal factors. He also addresses balance sheet concerns, indicating a low risk of an equity raise due to the company’s ability to generate free cash flow and refinance its debt. Tiano has adjusted his price objective to $72, reflecting revised earnings estimates but offset by higher valuation multiples, supporting his positive outlook on the stock.
In another report released on February 20, Deutsche Bank also maintained a Buy rating on the stock with a $70.00 price target.