CE
Celanese Corp - Ordinary Shares - Series A
Industrial/Transportation
06/13/2022
Presented
| Date | 06/08/2022 |
| Price | $158.44 |
| Market Cap | $17.16B |
| Ent Value | $19.55B |
| P/E Ratio | 8.46x |
| Book Value | $42.54 |
| Div Yield | 1.72% |
| Shares O/S | 108.31M |
| Ave Daily Vol | 925,578 |
| Short Int | 2.09% |
Current
| Price | $133.77 |
| Market Cap | $14.62B |
| Celanese Corp. engages in the provision of technology and specialty materials businesses. It operates through the following segments: Engineered Materials, Acetate Tow, Acetyl Chain and Other Activities. The Engineered Materials segment includes the engineered materials business, food ingredients business and certain strategic affiliates. The Acetate Tow segment serves consumer-driven applications and is a global producer and supplier of acetate tow and acetate flake used in filter products applications. The Acetyl Chain segment includes the integrated chain of intermediate chemistry, emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses, based on similar products, production processes, classes of customers and selling and distribution practices as well as economic similarities over a normal business cycle. The Other Activities segment consists of corporate center costs, including administrative activities such as finance, information technology and human resource functions, interest income and expenses associated with financing activities. The company was founded by Camille Dreyfus and Henri Dreyfus in 1918 and is headquartered in Irving, TX. |
Publicly traded companies mentioned herein: Celanese Corp (CE), Deutsche Bank AG (DB), DuPont de Nemours Inc (DD), S&P Global Inc (SPGI)
Highlights
The presenter is short shares of Celanese Corp (CE), a manufacturer of acetyls including acetic acid, vinyl acetate monomer (VAM), and acetate tow. His bearish outlook on the macroeconomic environment generally, the transition from goods to services, and detrimental trends in the energy landscape make him want to avoid intermediate chemicals (i.e., the companies that enable production of goods globally). Additionally, the industry has experienced a steepening cost curve as incremental production comes from Asia, where the cost of producing these chemicals is high relative to the US given the cost of coal and LNG in Asia, allowing US players like CE to over earn on a variety of chemicals. Adding to this, he is bearish on CE’s acquisition of DuPont’s Mobility & Materials (M&M) business. Putting this all together, he sees a commodity chemical producer that has been over-earning, recently levered up significantly, and is entering a potential global industrial slowdown. The stock currently trades at $158 per share, or 8x 2023 consensus EBITDA, and applying its historical average multiple of 9x on his 2023 EBITDA forecast that is below consensus, he sees downside to the low-$90 range.
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