We recently published a list of 10 Best Materials Stocks to Buy Right Now. In this article, we are going to take a look at where Celanese Corporation (NYSE:CE) stands against other best materials stocks.
As the uncertainty about the US Presidential election faded, market experts are now looking for the sectors expected to benefit from the re-election of President Trump. Donald Trump’s policies on housing, targeting federal lands and reducing regulatory barriers, demonstrate ambitious plans to fuel construction and housing availability, reported Fastmarkets.
Trump’s stance on immigration might also impact the pallet sector. A fall in immigration and expected deportations might result in a tightening of the labor market and wage pressures. Therefore, Fastmarkets reported that there might be a reacceleration in wage growth. That being said, huge deportations might be restricted as business leaders can oppose these regulations due to expectations of labor shortages and higher costs. Therefore, any policy changes might be moderated.
BofA Remains Optimistic on Materials Sector- Here’s Why
Strategists at Bank of America are optimistic about the materials sector. This optimism stems from the expectation of an earnings rebound after the US Fed’s rate-cutting cycle in September. The strategists also pointed out significant underinvestment in manufacturing, including fields such as mining and equipment replacement. They believe that robust decarbonization goals are expected to aid metals, mining, and commodities.
The large bank also cited China’s stimulus program, highlighting that the materials sector had the highest correlation when it comes to the S&P 500’s 11 sectors to the MSCI China Index. Moreover, Wall Street experts opine that the return of Trump’s Presidency is expected to fuel growth momentum for construction, infrastructure, domestic manufacturing, and industrial sectors.
Montgomery Investment Management believes that Trump’s focus on rebuilding America’s infrastructure should result in elevated government spending, which should aid construction companies and materials suppliers. Also, policies that target bringing manufacturing jobs back to the U.S., such as tariffs on imported goods, should support domestic manufacturing companies.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
US Construction Industry Has a Favourable Outlook
As per JLL, the US construction industry is well-placed for a year of measured growth and adaptation in 2025. The company believes that the push for green building practices from local governments and client directives, together with energy efficiency and lower carbon footprints, should continue to shape project requirements.
Also, improvements in the integration of advanced technologies including AI, IoT, and digital twins have been reshaping design, construction, and building management. This should provide opportunities for increased efficiency and value. JLL added that the US construction industry appears to be well-placed for growth and maintaining the right balance between short-term operational efficiency with long-term goals, while adapting to evolving organizational needs and technological advancements, remains crucial.
A computer scientist programming in an office, demonstrating the company’s innovative and modern approach to finance.
Our Methodology
To list the 10 Best Materials Stocks to Buy Right Now, we used a screener and sifted through several online rankings to extract the companies operating in the materials sector. Finally, the stocks were arranged in the ascending order of their average upside potential, as of November 14.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Celanese Corporation (NYSE:CE)
Average Upside Potential: 35.2%
Celanese Corporation (NYSE:CE) is a chemical and specialty materials company, which manufactures and sells high-performance engineered polymers in the US and internationally.
Wall Street analysts are optimistic about Celanese Corporation (NYSE:CE)’s long-term potential as it remains focused on cost management and operational excellence. For 2025, the company focuses on 4 key things. These include cost reduction, delivering synergies, enhancing the Engineered Materials pipeline, and leveraging the Acetyl Chain. Celanese Corporation (NYSE:CE) targets to align production and inventory with demand and remains focused on free cash flow.
Industry experts believe that strong margins in the Acetyl Chain segment are expected to continue because of advantageous technology and cost structures. While Celanese Corporation (NYSE:CE) is facing a challenging environment, its commitment to operational excellence, cost management, and a healthy project pipeline should help it overcome this environment. The company focuses on reducing manufacturing costs through the end of 2024 by temporarily idling production facilities in every region and driving cash generation through an expected $200 million inventory release in Q4 2024.
Celanese Corporation (NYSE:CE) continues to focus on implementing additional cost reduction programs which should realize incremental savings greater than $75 million by 2025 end. The focus of these programs will be on driving productivity in selling, general, and administrative (SG&A) costs. Celanese Corporation (NYSE:CE) plans to efficiently and stringently deploy capital, and targets next year’s CapEx spending to be below 2024 levels.
As per Wall Street, the shares of Celanese Corporation (NYSE:CE) have an average price target of $113.25.
Overall, CE ranks 4th on our list of 10 Best Materials Stocks to Buy Right Now. While we acknowledge the potential of CE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than CE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.