Celanese stock dives 32% on analyst downgrades

21 November 2008 17:48  [Source: ICIS news]

HOUSTON (ICIS news)--Celanese shares plunged 32% on Friday as analysts downgraded the US chemical producer's stock following its Thursday disavowal of its 2008 earnings guidance.

Celanese shares plunged to an all-time low of $5.71 on Friday from Thursday's close of $8.46, before bouncing back to $6.94 in New York trading.

Bank of America analyst Kevin McCarthy said he was expecting Celanese only to break even in the fourth quarter this year and slashed his estimate of year-end earnings per share (EPS) to $3.05 from his previous estimate of $3.48.

"It is hard to overstate chemical industry weakness," McCarthy said in a note to investors, adding that recent comments and announcements by Dow and BASF show that Celanese "is not suffering alone."

McCarthy remained upbeat about Celanese's business in the coming year, though, calling the stock a Buy and setting a 12-month target price of $17.

Citi Investment Research analyst PJ Juvekar was less positive, downgrading Celanese to Hold and cutting his price target to $9 from $28.

Citigroup slashed target prices and profit estimates for Celanese and four other major US chemical producers due to massive global destocking in the chemical supply chain.

On Thursday Celanese pulled its previous full-year earnings guidance of $3.40-$3.55 per share issued only a month ago, saying economic conditions have had more impact than it expected.

Based in Dallas, Texas, Celanese manufactures chemicals used in such products as paints, textiles and food ingredients and its Clear Lake area acetic acid plant is the world's largest acetic.

($1 = €0.80)

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By: Lane Kelley
+1 713 525 2653

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