BMO Capital lifts Celanese stock rating, raises price target to $55

On Tuesday, BMO Capital Markets adjusted its stance on Celanese Corporation (NYSE:CE), elevating the chemical company’s stock from an "Underperform" rating to a "Market Perform" status. Accompanying the rating upgrade, the firm also increased the price target for Celanese from $46.00 to $55.00. The stock currently trades at $52.47, with a market capitalization of $5.7 billion. According to InvestingPro data, 8 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s prospects.

The revision by BMO Capital comes as the firm acknowledges a shift in the risk-reward balance for Celanese. According to the analysts, while there remain concerns regarding macroeconomic and end-market uncertainties, as well as the company’s significant level of debt (with a debt-to-equity ratio of 2.53), these risks have somewhat diminished. Contributing factors to this reassessment include the easing of tariff wars and the expectation of Celanese’s balance sheet benefiting from near-term asset sales. The company maintains a healthy current ratio of 1.94, indicating strong short-term liquidity. InvestingPro analysis reveals a robust free cash flow yield of 9%, suggesting efficient cash generation despite challenges.

BMO Capital notes that the company has been implementing more stringent cost control measures. Additionally, the reduction in consensus estimates for Celanese has brought expectations to a more reasonable level, further contributing to the analysts’ perception of a more balanced risk-reward scenario for the stock.

The analysts’ commentary provided insight into the rationale behind the upgrade and price target adjustment. "We are raising our rating on CE from Underperform to Market Perform and have raised our target price to $55. While CE still has a reasonable amount of risk owing to macro/end-market uncertainty, amplified by CE’s significant debt, both of these risks are a bit more muted (with tariff wars moderating and CE’s balance sheet likely seeing near-term help from asset sales). With that, a more aggressive belt-tightening and a consensus that is now dramatically lower (and more reasonable), we see the risk-reward as more balanced," stated the BMO Capital analyst.

Investors and market watchers will be keeping a close eye on Celanese’s performance, as well as the impact of the company’s strategic moves on its financial health and stock valuation. The updated assessment by BMO Capital suggests a cautiously optimistic outlook for the chemical manufacturer’s near-term prospects. For deeper insights into Celanese’s valuation and growth potential, InvestingPro offers comprehensive analysis through its Pro Research Report, one of 1,400+ detailed company analyses available to subscribers.

In other recent news, Celanese Corporation reported a strong first quarter for 2025, significantly exceeding analysts’ expectations. The company posted earnings per share (EPS) of $0.57, compared to the forecasted $0.39, and revenue of $2.4 billion, surpassing the anticipated $2.26 billion. KeyBanc Capital Markets responded to these results by raising Celanese’s stock price target from $71.00 to $76.00, maintaining an Overweight rating. This adjustment is supported by Celanese’s strategic cost reduction initiatives and a promising outlook for divestments, which could yield substantial proceeds.

Additionally, Celanese has made important amendments to its corporate governance, as approved by shareholders, which include transitioning from supermajority to majority voting standards. These changes were detailed in an 8-K filing with the SEC. The company is also focusing on cash generation and debt reduction, with plans to explore divestiture opportunities that could yield between $1 billion and $2.5 billion over the next 2.5 years. Celanese’s strategic moves, including potential gains from divestments and internal cost management, are considered key drivers of the improved outlook as highlighted by KeyBanc.

These recent developments reflect Celanese’s efforts to strengthen its financial position and governance structure, aiming to enhance investor confidence and address market challenges.

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