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Methanex Corp. (TSE:MX)
TSX:MX
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Methanex
(TSX:MX)
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Rating:63Neutral
Price Target:
C$84.00
▲(8.37% Upside)
Action:ReiteratedDate:03/13/26
The score is driven primarily by mixed financial performance—strong cash generation but pressured net profitability and meaningful leverage—tempered by a high P/E valuation. Technicals are a notable positive with a strong uptrend, while the earnings call was balanced: slightly improving near-term EBITDA outlook and deleveraging focus, but ongoing integration, operational risks, and market uncertainty.
Positive Factors
Strong free cash flow
Methanex reported materially higher free cash flow in 2025 (~$732M) with operating cash flow coverage above 1x in key years. Durable positive FCF supports sustained debt paydown, integration funding and maintenance capex, giving the company financial flexibility through commodity cycles.
Industry‑leading safety record
Zero Tier‑1 process safety incidents over two years and recordable injury rates far below peers indicate strong operational discipline. Superior safety reduces outage, regulatory and reputational risk, supporting higher plant uptime and more predictable long‑term production and cash generation.
Scale and integrated logistics
A ~9.0Mt equity production base combined with dedicated Waterfront shipping and time‑charters gives Methanex durable market access and placement flexibility. Control of logistics reduces spot freight exposure and supports margin stability by reliably serving higher‑value regions over time.
Negative Factors
Meaningful leverage
Net debt levels remain meaningful at roughly 1.4–1.7x equity. For a cyclical chemicals producer this elevates refinancing and interest rate risk, constrains capital allocation flexibility, and amplifies earnings sensitivity to methanol price swings despite recent deleveraging progress.
Compressed, cyclical profitability
Margins and net profitability have compressed materially since 2021 and revenue has been broadly flat to down, reflecting volatile methanol pricing and cost pressures. This cyclicality weakens return on equity and makes sustainable shareholder returns contingent on favorable market structure rather than internal improvements alone.
Feedstock & regional gas risk
Structural and seasonal gas constraints in regions like Egypt and New Zealand, plus only ~50% hedging in North America, leave Methanex exposed to feedstock price spikes and supply limits. These risks can raise production costs, force curtailments, and introduce sustained margin pressure in key geographies.
Methanex (MX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.99B
Dividend Yield1.87%
Average Volume (3M)212.63K
Price to Earnings (P/E)35.4
Beta (1Y)1.57
Revenue Growth-0.65%
EPS Growth46.15%
CountryCA
Employees1,415
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)-0.19
Shares Outstanding77,339,520
10 Day Avg. Volume143,070
30 Day Avg. Volume212,631
Financial Highlights & Ratios
PEG Ratio-0.66
Price to Book (P/B)1.18
Price to Sales (P/S)0.79
P/FCF Ratio3.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$81.47Price Target Upside5.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)4.46
Revenue Forecast (FY)C$5.50B
Methanex Business Overview & Revenue Model
Company DescriptionMethanex Corporation produces and supplies methanol in North America, the Asia Pacific, Europe, and South America. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.
How the Company Makes MoneyMethanex makes money primarily by producing and selling methanol. Its core revenue stream is methanol sales volumes multiplied by prevailing methanol prices, with realized pricing influenced by regional supply-demand conditions and the company’s global marketing reach. Revenue is generated through (1) sales from methanol produced at its own plants, where profitability depends on plant utilization, production costs, and feedstock/energy inputs (commonly natural gas or other local feedstocks, depending on site); and (2) marketing and distribution activities, where Methanex may earn margins by sourcing methanol and selling to end customers while managing shipping, storage, and delivery. The company’s earnings are significantly affected by methanol price cycles, changes in global demand (chemicals, construction-related products, fuels), and the cost/availability of key inputs (especially natural gas) as well as logistics costs and reliability of operations. Methanex’s scale, customer relationships, and logistics capabilities can support its ability to place volumes into higher-value regions and maintain market access, which contributes to realized margins over time.
Methanex Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presented a mix of operational and financial positives — excellent safety performance, strong cash position and active deleveraging, stable-to-improving operations at key plants, a clear 2026 production guide (9.0Mt), and a defined synergy target from the OCI acquisition — while also highlighting near-term challenges including Q4 outage-related costs, an adjusted net loss, integration costs not fully realized, structural and seasonal gas supply risks (Chile, Egypt, New Zealand), and significant market uncertainty from the Middle East escalation that affects supply reliability and pricing volatility. Management expects slightly higher adjusted EBITDA in Q1 and is prioritizing debt repayment, but material upside is contingent on market tightness and realization of synergies.Q4-2025 Updates
Positive Updates
Outstanding Safety Performance
Zero Tier 1 process safety incidents over the past two years; recordable injury rates of 0.09 (2024) and 0.12 (2025) per 200,000 hours versus the chemical industry average of 0.59 in 2024 (company rates ~85% and ~80% lower than the industry average, respectively).
Q4 Financial and Sales Metrics
Fourth quarter average realized price of $331 per tonne; produced sales of approximately 2,400,000 tonnes; adjusted EBITDA of $180,000,000 and an adjusted net loss of $11,000,000.
Strong Cash Position and Deleveraging
Ended the year with $425,000,000 in cash; repaid $75,000,000 of Term Loan A in Q4 and a further $50,000,000 in early 2026; remaining Term Loan A balance $300,000,000 with priority to apply free cash flow to repay debt.
2026 Production Guidance
Expected equity production for 2026 of approximately 9,000,000 tonnes, with regional guidance of just over 6,000,000 tonnes in North America, ~1.3–1.4M tonnes in Chile, ~0.5–0.6M tonnes in Egypt, ~0.8M tonnes in Trinidad, and <0.5M tonnes in New Zealand.
Integration Progress and Synergy Target
Integration of acquired assets underway with operations improving (Geismar running stably); targeting $30,000,000 of synergies by end of 2026 with realization continuing into 2027; early CapEx below deal-model average due to recent turnarounds.
Q1 Price and EBITDA Outlook
First quarter average realized price estimated at $330–$340 per tonne (pre-current Middle East escalation) and the company expects slightly higher adjusted EBITDA in Q1 versus Q4.
Supply-Chain and Shipping Advantage
Dedicated Waterfront Shipping and time-chartered fleet provide supply-chain security and limited spot exposure; company notes shipping rates on many lanes have approximately doubled (+100%), but its fixed charters mitigate immediate cost exposure and provide competitive reliability benefits.
Negative Updates
Adjusted Net Loss and EBITDA Pressure
Despite positive adjusted EBITDA ($180M), the company recorded an adjusted net loss of $11M in Q4; adjusted EBITDA was lower than earlier 2025 levels due to a lower average realized price and immediate recognition of fixed costs from Q4 outages.
Plant Outages and Lost Production
Beaumont experienced a short unplanned outage; Natgasoline took a planned 10-day outage for catalyst replacement; Chile lost approximately 75,000 tonnes of production in December due to a third‑party pipeline failure.
Gas Supply Constraints and Regional Risks
Seasonal and structural gas constraints noted: reduced Iranian output seasonally impacted China flows; Egypt faces potential summer industrial gas limitations despite current full-rate operation; New Zealand has structurally challenging, declining gas availability that threatens long‑term operations.
OCI Acquisition Not Yet Fully Accretive
Expected acquisition benefits not fully realized yet: synergies still being implemented, pre-synergy costs elevated during integration, and methanol pricing below the ~ $350/tonne level needed to meet pro forma deal EBITDA assumptions (company noted deal modeled at ~$350/tonne).
Elevated Near-Term Operating Costs
Q4 saw unabsorbed fixed costs and elevated ocean freight; one-off and integration-related costs remain as the company completes the OCI transaction, with expectations that fixed cost structure will adjust down by 2027.
Market Uncertainty from Middle East Escalation
Conflict in the Middle East creates material supply reliability risk; Iranian and other regional exports materially disrupted (Iran ~9–10M tonnes/year), causing volatility in international methanol flows and risk of demand destruction; duration and severity remain uncertain.
Hedging and Feedstock Exposure
North American gas hedging around 50% across the portfolio leaves some exposure to winter gas price spikes; management noted higher gas costs contributed to moderating expected first-quarter earnings uplift.
Company Guidance
Management guided to a Q1 average realized price of $330–$340/tonne and, with similar produced sales to Q4 (~2.4 million tonnes), expects slightly higher adjusted EBITDA versus Q4’s $180 million (Q4 ARP was $331/t and Q4 adjusted net loss was $11 million); they reiterated 2026 equity production of ~9,000,000 tonnes (North America >6.0 Mt, Chile 1.3–1.4 Mt, Egypt 0.5–0.6 Mt, Trinidad ~0.8 Mt, New Zealand <0.5 Mt), safety metrics of zero Tier‑1 process safety incidents over two years and recordable injury rates of 0.09 (2024) and 0.12 (2025) per 200,000 hours (vs. chemical industry 0.59), ownership stakes (63.1% Atlas, 50% Egypt, 50% Natgasoline, 60% Waterfront), year‑end cash of $425 million after repaying $75M in Q4 and $50M YTD (Term Loan A balance $300M) and a commitment to direct all free cash flow to repay Term Loan A, a $30M synergy target for 2026 (run‑rate into 2027), ~50% gas hedging in North America, and close monitoring of Middle East supply disruption (Iran ~9–10 Mt/yr, other Gulf ~9–10 Mt/yr, internationally traded market ~55 Mt) that has pushed Chinese spot >$300/t and European spot near $400/t.Methanex Financial Statement Overview
Summary
Cash generation is the key positive (solid operating cash flow and consistently positive free cash flow, with 2025 FCF notably higher than 2024). Offsetting this, profitability and earnings quality have weakened since the 2021–2022 peak (net margin ~2.2% in 2025 and low ROE), and leverage remains meaningful for a cyclical chemicals business.Income Statement
Revenue has been broadly flat to down since 2021 (including a sharp step-down vs. 2022), with 2025 showing only low-single-digit growth. Profitability improved at the gross profit line in 2025, but bottom-line performance remains pressured: net profit margin fell to ~2.2% in 2025 from ~4–5% in 2023–2024 and ~11% in 2021. Operating profitability is positive (EBIT margin ~12.9% and EBITDA margin ~25.3% in 2025), but earnings volatility over the cycle (losses in 2020, strong 2021–2022, weaker 2024–2025) reduces the score.57
Neutral
Balance Sheet
Leverage is meaningful, with debt running around 1.4–1.7x equity in most years (improving materially from ~2.7x in 2020, but still elevated). Equity has grown versus 2020, supporting a larger asset base, yet returns on equity have compressed sharply—from very strong levels in 2021–2022 to low-single-digits in 2025—suggesting weaker efficiency and/or a tougher pricing environment. Overall, the balance sheet looks more stable than 2020, but still carries above-average leverage for a cyclical chemicals profile.52
Neutral
Cash Flow
Cash generation is a key strength: operating cash flow remains solid and free cash flow is consistently positive, with 2025 free cash flow (~$732M) notably higher than 2024 despite a negative growth rate year-over-year. Cash flow support for obligations looks reasonable with operating cash flow coverage above 1.0x in 2021–2022 and 2024–2025 (though it dipped in 2023). A weakness is that free cash flow has been volatile across the period and, in 2025, free cash flow did not fully cover net income (free cash flow to net income below 1.0x), pointing to some earnings-to-cash disconnect.69
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.65B | 3.72B | 3.72B | 4.31B | 4.41B |
| Gross Profit | 1.30B | 710.42M | 655.40M | 865.09M | 1.08B |
| EBITDA | 925.00M | 798.42M | 794.81M | 983.03M | 1.08B |
| Net Income | 81.27M | 163.99M | 174.14M | 353.83M | 482.36M |
Balance Sheet | |||||
| Total Assets | 7.27B | 6.60B | 6.43B | 6.63B | 6.09B |
| Cash, Cash Equivalents and Short-Term Investments | 428.05M | 891.91M | 458.01M | 857.75M | 932.07M |
| Total Debt | 3.50B | 3.23B | 3.01B | 3.02B | 2.88B |
| Total Liabilities | 4.55B | 4.22B | 4.25B | 4.20B | 4.13B |
| Stockholders Equity | 2.44B | 2.09B | 1.93B | 2.11B | 1.68B |
Cash Flow | |||||
| Free Cash Flow | 731.56M | 563.11M | 211.82M | 400.38M | 748.49M |
| Operating Cash Flow | 832.29M | 737.18M | 660.27M | 977.76M | 993.93M |
| Investing Cash Flow | -1.38B | -99.74M | -508.58M | -553.14M | -253.05M |
| Financing Cash Flow | 73.09M | -203.55M | -551.42M | -508.53M | -643.09M |
Methanex Technical Analysis
Positive
77.51
Price Trends
67.38
Positive
59.75
Positive
54.13
Positive
Market Momentum
2.06
Negative
59.39
Neutral
49.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MX, the sentiment is Positive. The current price of 77.51 is above the 20-day moving average (MA) of 70.51, above the 50-day MA of 67.38, and above the 200-day MA of 54.13, indicating a bullish trend. The MACD of 2.06 indicates Negative momentum. The RSI at 59.39 is Neutral, neither overbought nor oversold. The STOCH value of 49.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MX.
Methanex Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$763.28M | 3.48 | 30.02% | ― | 20.52% | 1196.33% | |
66 Neutral | C$1.75B | 11.01 | 18.28% | 4.73% | 10.20% | -11.22% | |
63 Neutral | C$5.99B | 35.38 | 9.35% | 1.87% | -0.65% | 46.15% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
TSE:MX
Methanex
77.51
23.66
43.94%
TSE:CHE.UN
Chemtrade Logistics
15.45
6.19
66.77%
TSE:IFOS
Itafos
3.95
1.66
72.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.