Zacks senior chemicals industry analyst Paul Raman, CFA remains bullish on shares of Texas-based chemicals producer Celanese (CE). Here's what his latest research report had to say:
'Celanese has a strong growth strategy, with growth in Asia as a key factor. There is $400 million of free cash flow per year primarily focused on share repurchases. In addition, the company has leadership positions in oligopolistic markets that have solid fundamentals. As a result, we rate the shares a Buy with a target of $50.
'The company produces chemicals, fibers, pharmaceuticals and plastics, such as the thermoplastic cellulose acetate used to manufacture cigarette filters. Celanese is the world's largest producer of acetyl products, including acetic acid, vinyl acetate monomer and polyacetals. Their largest plant in Pasadena, Texas is home to the world's largest acid production unit.
'The drivers for success are restructuring, innovation, organic growth, and a focus on Asia. About $100-150 million of this improvement is from low-cost Asian expansions. The company has annual free cash flow in excess of $400 million. With the completion of the 8.5 million share repurchase in July, Celanese is continuing to evaluate additional share repurchases.'
Read the full analyst report on CE.
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