Celanese (NYSE:CE) is facing significant challenges as customer demand deteriorates, negatively impacting both sales volumes and prices. The company anticipates these difficult conditions will persist in the short term, particularly given ongoing softness in key markets including automotive, construction, and industrial applications. The financial impact was severe in the fourth quarter, with Celanese recording a substantial $1.4 billion loss on revenue of $2.4 billion.
CE stock plunged 21% following the earnings announcement. Despite its recent fall, CE stock looks unattractive – making it a bad pick to buy at its current price of around $55. We believe there are several major concerns with CE stock, which makes it unattractive despite its current valuation being very low.
We arrive at our conclusion by comparing the current valuation of CE stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Celanese along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very weak operating performance and financial condition, as detailed below.
How does Celanese’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, CE stock looks cheap compared to the broader market.
• Celanese has a price-to-sales (P/S) ratio of 0.7 vs. a figure of 3.1 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 7.0 compared to 24.4 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 6.0 vs. the benchmark’s 24.4
How have Celanese’s revenues grown over recent years?
Celanese’s Revenues have declined marginally over recent years.
• Celanese has seen its top line grow at an average rate of 25.8% over the last 3 years (vs. 9.8% for S&P 500)
• Its revenues have shrunk 2.2% from $11 Bil to $10 Bil in the last 12 months (vs. change of 5.6% for S&P 500)
• Also, its quarterly revenues shrank 2.8% to $2.6 Bil in the most recent quarter from $2.7 Bil a year ago (vs. 7.2% change for S&P 500)
How profitable is Celanese?
Celanese’s profit margins are around the median level for companies in the Trefis coverage universe.
• Celanese’s Operating Income over the last four quarters was $1.1 Bil, which represents a moderate Operating Margin of 10.5% (vs. 12.6% for S&P 500)
• Celanese’s Operating Cash Flow (OCF) over this period was $1.3 Bil, pointing to a moderate OCF-to-Sales Ratio of 12.4% (vs. 14.4% for S&P 500)
Does Celanese look financially stable?
Celanese’s balance sheet looks very weak.
• Celanese’s Debt figure was $13 Bil at the end of the most recent quarter, while its market capitalization is $6.0 Bil (as of 2/19/2025). This implies a very poor Debt-to-Equity Ratio of 171.7% (vs. 19.7% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $813 Mil of the $26 Bil in Total Assets for Celanese. This yields a poor Cash-to-Assets Ratio of 3.1% (vs. 14.1% for S&P 500)
How resilient is CE stock during a downturn?
CE stock has fared much worse than the benchmark S&P 500 index during the last 2 economic downturns. Worried about the impact of a market crash on CE stock? Our dashboard How Low Can Celanese Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.
COVID Recession (February to April 2020)
• CE stock fell 51.7% from a high of $110.25 on 1 January 2020 to $53.24 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Covid peak by 11 August 2022 – taking 876 days to recover while the S&P 500 took 148 days
• Since then, the stock has increased to a high of $169.28 on 31 March 2024 and currently trades at around $55
Great Recession (December 2007 to June 2009)
• During the 2007-09 recession, CE stock fell from a peak value of $38.38 on 23 June 2008 to $5.81 on 3 March 2009 a decline of 84.9% (vs. a peak-to-trough decline of 56.8% for the S&P 500)
• However, the stock fully recovered to its pre-recession peak by 3 May 2013 – taking 1522 days to recoup its losses vs. the 1480 days taken by the S&P 500 to recover
Putting all the pieces together: What it means for CE stock
In summary, Celanese’s performance across the parameters detailed above are as follows:
• Growth: Neutral
• Profitability: Neutral
• Financial Stability: Extremely Weak
• Downturn Resilience: Extremely Weak
• Overall: Very Weak
Hence, despite its very low valuation, we think that the stock is unattractive, which supports our conclusion that CE is a bad stock to buy.
While you would do well to avoid CE stock for now, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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