The shares of Celanese (CE) have performed fairly well on a year-to-date basis, up around 18% and outperforming the broader chemical space on soaring prices for acetic acid and vinyl acetate monomer (or VAM), and almost keeping pace with the S&P 500. Like with many cyclical names, though, the shares have started to underperform as investors anticipate normalizing prices and weaker 2022 profits.
As I’ve said in pieces on steel companies and other chemical companies, in the short term it’s tough to make money fighting the tape, and it’s tough to make money in cyclical commodity names when commodity prices and margins are heading lower off a peak. Longer term, though, I like Celanese’s market-leading and very efficient acetyl chain and engineered material businesses, and I think today’s price doesn’t really reflect the full value. Tactically, I’m cautious about recommending the shares today, but the valuation makes this a name to watch.
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Celanese Stock Is Seeing Cyclical Sentiment Headwinds, But Long-Term Fundamentals Look Good
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