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The firm believes that many of the actions Celanese is undertaking to raise cash will have negative repercussions on its future growth and earnings trajectory. Moreover, the company faces challenges within its operating markets that must be addressed before achieving a scenario where revenue and earnings can resume growth.
“We see the situation in Europe created by an overflow of Chinese product as particularly challenging and in our view may take another 12 months or more to reverse,” mentioned Piper Sandler. Consequently, the company’s mix and therefore margins and earnings might remain below optimal levels for a longer period than the current market outlook suggests.
“The company’s choice to stretch out maintenance may also create longer-term issues around production efficiency and expensive downtime during periods of stronger profitability,” added Piper Sandler.
By Davit Kirakosyan
