BoA ups Celanese’s EPS estimates on strong Q3

24 October 2007 09:59  [Source: ICIS news]

MUMBAI (ICIS news)--Bank of America (BoA) raised Celanese Corp’s 2007 and 2008 earnings per share (EPS) estimates on Wednesday following the company’s strong third quarter performance, while increasing its stock target price.

The bank raised the value-added industrial chemicals producer’s 2007 projected EPS to $3.20 from $3.00, which is at the high end of the management’s range of $3.10-$3.20.

BoA raised its estimates in response to the strong third-quarter EPS of $0.73 posted by Celanese, which beat the bank’s estimated $0.59.

"For 2008, we are increasing our estimate from $3.45 to $3.60, partially aided by expected tax relief in Germany," it added.

BoA raised Celanese’s stock price target to $46/share from $42/share earlier, while maintaining its ‘buy’ rating on the company.

Prospects for a healthy acetyls cycle through 2009, substantial value in unconsolidated joint ventures, a low-cost position with proprietary technology and maximum exposure to Asia in the sector are positive factors for Celanese, BoA said.

"Also, we continue to monitor the global supply-demand balance for acetic acid and VAM [vinyl acetate monomer], and consequent effects on prices and margins," it added.

Aside from macroeconomic concerns which could pose a risk to Celanese, company-specific risks include elevated leverage versus peers, BoA said.

The company's shares last closed unchanged at $40.12 on the New York Stock Exchange.

($1 = €0.70)

By: Divya Chowdhury
+65 6780 4359

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