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Methanex Corp. (TSE:MX)
TSX:MX
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Methanex
(TSX:MX)
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Rating:74Outperform
Price Target:
C$60.00
â–²(8.28% Upside)
Methanex's overall stock score reflects its strong financial performance, particularly in cash flow generation and operational efficiency, despite high leverage. The company's valuation is attractive, with a low P/E ratio and reasonable dividend yield. Positive earnings call sentiment and strategic acquisitions further bolster the outlook, although technical indicators suggest caution due to potential overbought conditions.
Positive Factors
Negative Factors
Methanex (MX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$4.29B
Dividend Yield1.87%
Average Volume (3M)192.68K
Price to Earnings (P/E)10.6
Beta (1Y)1.61
Revenue Growth2.80%
EPS Growth79.30%
CountryCA
Employees1,415
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)1.34
Shares Outstanding77,339,520
10 Day Avg. Volume246,770
30 Day Avg. Volume192,683
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.85
Enterprise Value/Revenue2.22
Enterprise Value/Gross Profit8.94
Enterprise Value/Ebitda8.17
Forecast
1Y Price Target
$66.52Price Target Upside20.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
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 generates revenue primarily through the production and sale of methanol to a wide range of industrial customers. The company's revenue model is based on the sale of methanol at market-driven prices, which can fluctuate based on supply and demand dynamics, raw material costs, and global economic conditions. Key revenue streams include direct sales to customers and long-term contracts that provide stability and predictability in cash flows. Additionally, Methanex benefits from strategic partnerships and joint ventures that enhance its production capabilities and market reach. The company's investment in efficient production technology and its ability to respond to market trends also play a crucial role in maximizing profitability.
Methanex Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements such as the successful acquisition of OCI's methanol business and increased global demand, but these were somewhat offset by challenges including lower realized prices and production issues in New Zealand and Egypt. The company's strong financial position and strategic focus on integration and deleveraging provide a positive outlook.Q2-2025 Updates
Positive Updates
Successful Acquisition of OCI's Methanol Business
Methanex closed the acquisition of OCI's methanol business, adding two world-scale facilities in Beaumont, Texas. This strategic acquisition is expected to significantly strengthen Methanex's production portfolio and contribute to future growth.
Increased Global Methanol Demand
Global methanol demand increased by approximately 4% in Q2 2025 compared to Q1 2025, driven primarily by higher demand in China across various applications.
Strong Production and Operational Highlights
Higher production was achieved in Geismar and Trinidad, with successful operation of G3 at high rates. The new Beaumont and Natgasoline assets have operated safely and at full rates since acquisition.
Positive Developments in Natural Gas Availability in Chile
Despite seasonal idling, positive developments in natural gas availability in Chile were noted, indicating potential for improved production rates over time.
Strong Financial Position
Ended Q2 2025 with $485 million in cash and access to a $600 million undrawn revolving credit facility, with plans to focus on deleveraging in the near term.
Negative Updates
Lower Average Realized Price
The average realized price of methanol decreased from over $400 per ton in Q1 2025 to $374 per ton in Q2 2025, impacting adjusted EBITDA, which fell to $183 million.
Challenges in New Zealand and Egypt
Lower production in New Zealand due to gas constraints and temporary idling of operations; in Egypt, curtailments due to significant import disruptions were noted.
Reduced Production Guidance for New Zealand
Production guidance for New Zealand was reduced to 400,000 tonnes due to gas supply challenges, down from a previous assumption of 1 million tonnes.
Company Guidance
During the Methanex Corporation's second quarter 2025 results conference call, guidance was provided on several key financial metrics and strategic developments. The company reported an average realized price of $374 per tonne and produced sales of approximately 1.5 million tonnes, resulting in an adjusted EBITDA of $183 million and an adjusted net income of $0.97 per share. Methanex successfully completed the acquisition of OCI's methanol business, enhancing its production portfolio with facilities in Texas. Looking ahead to the third quarter, the company anticipates methanol affordability into methanol-to-olefins (MTO) and the marginal cost of production in China to range between $270 and $290 per tonne, with continued realized pricing premiums in other regions. Methanex set its third-quarter European quarterly price at EUR 530 per tonne, a decrease from the previous quarter, and posted North America, Asia Pacific, and China prices at $778, $370, and $350 per tonne, respectively. The company expects higher adjusted EBITDA in the third quarter compared to the second quarter, based on increased produced sales offset by a lower forecasted average realized price.Methanex Financial Statement Overview
Summary
Methanex demonstrates solid operational efficiency and cash flow generation, with healthy EBIT and EBITDA margins. However, challenges include a high debt-to-equity ratio and declining revenue, which impact the overall financial performance score.Income Statement
Methanex's income statement shows a mixed performance. The company has maintained a decent gross profit margin of 21.9% TTM, indicating effective cost management. However, the net profit margin is relatively low at 7.0% TTM, reflecting challenges in translating revenue into profit. Revenue has declined by 3.3% TTM, suggesting potential demand issues or competitive pressures. Despite this, EBIT and EBITDA margins are healthy at 16.1% and 27.3% TTM, respectively, showing operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 1.43 TTM, indicating significant leverage, which could pose financial risk. However, the return on equity is reasonably strong at 11.3% TTM, suggesting effective use of equity to generate profits. The equity ratio stands at 33.9% TTM, reflecting a moderate level of financial stability.65
Positive
Cash Flow
Methanex's cash flow statement is robust, with a 14.9% growth in free cash flow TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.40 TTM, indicating good cash conversion. Additionally, the free cash flow to net income ratio is 0.84 TTM, suggesting efficient cash utilization relative to net income.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.58B | 3.72B | 3.72B | 4.31B | 4.41B | 2.65B |
| Gross Profit | 886.70M | 710.42M | 655.40M | 865.09M | 1.08B | 294.84M |
| EBITDA | 970.42M | 798.42M | 794.81M | 1.09B | 1.17B | 334.53M |
| Net Income | 251.85M | 163.99M | 174.14M | 353.83M | 482.36M | -125.33M |
Balance Sheet | ||||||
| Total Assets | 7.75B | 6.60B | 6.43B | 6.63B | 6.09B | 5.70B |
| Cash, Cash Equivalents and Short-Term Investments | 485.38M | 891.91M | 458.01M | 857.75M | 932.07M | 833.84M |
| Total Debt | 3.76B | 3.23B | 3.01B | 3.02B | 2.88B | 3.09B |
| Total Liabilities | 4.83B | 4.22B | 4.25B | 4.20B | 4.13B | 4.25B |
| Stockholders Equity | 2.62B | 2.09B | 1.93B | 2.11B | 1.68B | 1.15B |
Cash Flow | ||||||
| Free Cash Flow | 913.89M | 563.11M | 211.82M | 400.38M | 748.49M | 119.27M |
| Operating Cash Flow | 1.08B | 737.18M | 660.27M | 977.76M | 993.93M | 461.08M |
| Investing Cash Flow | -1.38B | -99.74M | -508.58M | -553.14M | -253.05M | -278.06M |
| Financing Cash Flow | 352.53M | -203.55M | -551.42M | -508.53M | -643.09M | 234.06M |
Methanex Technical Analysis
Positive
55.41
Price Trends
49.17
Positive
47.73
Positive
53.23
Positive
Market Momentum
1.61
Positive
65.25
Neutral
31.61
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 55.41 is above the 20-day moving average (MA) of 53.06, above the 50-day MA of 49.17, and above the 200-day MA of 53.23, indicating a bullish trend. The MACD of 1.61 indicates Positive momentum. The RSI at 65.25 is Neutral, neither overbought nor oversold. The STOCH value of 31.61 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Performance Comparison
TSE:MX
Methanex
55.41
0.57
1.03%
TSE:CHE.UN
Chemtrade Logistics
13.34
2.94
28.27%
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.