Celanese (CE) is seeing mixed investor sentiment as the commodity chemicals sector is currently "out of favor," Morgan Stanley said in a Thursday note.

In Q2, the company's product spreads did not remain elevated as projected but reverted to the mean, in line with company guidance that previously disappointed investors, according to the note. This reduces the probability and size of positive revisions, the note said.

In the acetyls market, the company benefited from strong pricing in China in April and early May, but the prices moderated sooner than expected. Demand was also weaker than anticipated during Q2, the note said. For Celanese's Engineered Materials segment, Morgan Stanley also projected incremental weakness in revenue from automotive exposure.

Morgan Stanley revised its EPS estimates on Celanese to $2.09 from $2.20 for Q2. Full-year 2026 projected EPS was revised to $5.68 from $6.05; full-year 2027 EPS to $5.89 from $6.26; and full-year 2028 EPS was revised to $6.94 from $7.30.

Morgan Stanley maintained the company's stock rating at equal-weight and reduced the price target to $58 from $72.

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