Methanex Corporation Price Target Lowered on Higher Risk of a Recession

• The consensus price target for Methanex Corporation (NASDAQ:MEOH) has been on a downward trend, indicating analysts' conservative expectations for the stock's performance.
• Despite recent price target downgrades, Methanex is anticipated to report earnings growth, with some analysts remaining optimistic about its upcoming performance.
• Investors are advised to consider the potential impact of U.S. tariffs on Methanex and the broader chemical industry, which could lead to economic disruptions and affect demand.

Methanex Corporation (NASDAQ:MEOH) is a leading global producer and supplier of methanol, a key component in various industrial and energy applications. The company operates across North America, the Asia Pacific, Europe, and South America, and manages a fleet of ocean-going vessels to support its extensive operations. Methanex competes with other chemical producers in the global market, striving to maintain its position as a top methanol supplier.

Recently, the consensus price target for Methanex's stock has shown a downward trend. A year ago, the average price target was $54.56, which decreased to $49.5 in the last quarter, and most recently, it has further declined to $36. This suggests that analysts have become more conservative in their expectations for Methanex's stock performance. Piper Sandler analyst Charles Neivert downgraded Methanex from Overweight to Neutral, adjusting the price target from $71 to $36, influenced by U.S. tariffs and potential economic disruptions.

Despite the downward trend in price targets, Methanex is anticipated to report earnings growth next week. Wall Street expects the company to have the right combination of factors to potentially exceed earnings estimates. Methanex has a strong track record of surpassing earnings expectations, and analyst Michael Leithead from Barclays has set a higher price target of $63, indicating optimism about the company's upcoming performance.

Methanex shares recently experienced a significant increase, soaring by 17.1% in the most recent trading session, with trading volume exceeding the average. However, the current trend in earnings estimate revisions suggests that there may not be a further price increase in the near term. This indicates that while there is short-term optimism, analysts remain cautious about the stock's long-term performance.

Investors should consider the potential impact of U.S. tariffs on Methanex and the broader chemical industry. These tariffs could lead to economic disruptions, affecting demand and increasing costs. The anticipated effects include a decline in demand both domestically and internationally, increased unit costs, lower margins, and higher future finance costs. Staying informed about these developments is crucial for those interested in Methanex's stock.

• The consensus price target for Methanex Corporation (NASDAQ:MEOH) has been on a downward trend, indicating analysts' conservative expectations for the stock's performance.
• Despite recent price target downgrades, Methanex is anticipated to report earnings growth, with some analysts remaining optimistic about its upcoming performance.
• Investors are advised to consider the potential impact of U.S. tariffs on Methanex and the broader chemical industry, which could lead to economic disruptions and affect demand.

Methanex Corporation (NASDAQ:MEOH) is a leading global producer and supplier of methanol, a key component in various industrial and energy applications. The company operates across North America, the Asia Pacific, Europe, and South America, and manages a fleet of ocean-going vessels to support its extensive operations. Methanex competes with other chemical producers in the global market, striving to maintain its position as a top methanol supplier.

Recently, the consensus price target for Methanex's stock has shown a downward trend. A year ago, the average price target was $54.56, which decreased to $49.5 in the last quarter, and most recently, it has further declined to $36. This suggests that analysts have become more conservative in their expectations for Methanex's stock performance. Piper Sandler analyst Charles Neivert downgraded Methanex from Overweight to Neutral, adjusting the price target from $71 to $36, influenced by U.S. tariffs and potential economic disruptions.

Despite the downward trend in price targets, Methanex is anticipated to report earnings growth next week. Wall Street expects the company to have the right combination of factors to potentially exceed earnings estimates. Methanex has a strong track record of surpassing earnings expectations, and analyst Michael Leithead from Barclays has set a higher price target of $63, indicating optimism about the company's upcoming performance.

Methanex shares recently experienced a significant increase, soaring by 17.1% in the most recent trading session, with trading volume exceeding the average. However, the current trend in earnings estimate revisions suggests that there may not be a further price increase in the near term. This indicates that while there is short-term optimism, analysts remain cautious about the stock's long-term performance.

Investors should consider the potential impact of U.S. tariffs on Methanex and the broader chemical industry. These tariffs could lead to economic disruptions, affecting demand and increasing costs. The anticipated effects include a decline in demand both domestically and internationally, increased unit costs, lower margins, and higher future finance costs. Staying informed about these developments is crucial for those interested in Methanex's stock.

Analysts at RBC Capital provided their views on Methanex Corporation (NASDAQ:MEOH), noting they continue to see recessionary uncertainties and the potential for lower methanol prices in 2023, which could pressure the company’s shares.

Methanex recently released its North American, Asian Pacific, and China non-discounted methanol reference prices for January at $575/MT (unchanged from December), $410/MT (unchanged), and $370/MT (down 6% from December), respectively.

The analysts revised their 2022, 2023, and 2024 adjusted EBITDA estimates to $933, $621 and $675 million, respectively (from $949, $525, and $914 million, respectively). The analysts maintained their Sector Perform rating and $45 price target on the company’s shares.

Methanex Corporation (NASDAQ:MEOH) shares were down more than 3% today after RBC Capital downgraded the company to Sector Perform from Outperform and lowered its price target to $45 from $50.

The analysts see rising recessionary uncertainties and the potential for lower methanol prices in 2023. Although elevated natural gas prices could support methanol prices, analysts think an economic slowdown will lead to lower overall methanol prices.

CMA (Chemical Market Analytics) materially reduced its methanol price forecast, reflecting lower pricing through 2023, primarily driven by a weaker Asian market outlook and its impact on global benchmark pricing.

RBC Capital analysts lowered their price target on Methanex Corporation (NASDAQ:MEOH) to $50 from $55 on rising recessionary uncertainties.

The analysts updated their financial forecast to reflect Chemical Market Analytics' latest methanol price forecast, and Methanex's updated reference prices. Methanex's monthly posted prices were mostly flat for October. Methanex recently reaffirmed its North American and Asia Pacific non-discounted reference prices for October at $585/MT and $410/MT, respectively, but modestly increased its China reference price by 5% to $395/MT (from $375/MT).

The analysts reiterated their Outperform rating as they believe the shares are suitable for investors that have a more constructive view on the economy (i.e., soft landing/minor recession). The analysts reduced their price target to $50 from $55 to reflect a lower 2023 EBITDA estimate and a higher risk of a moderate to deep recession.

RBC Capital analysts lowered their price target on Methanex Corporation (NASDAQ:MEOH) to $60 from $65 given the higher risk of a recession potentially leading to lower methanol prices. However, the analysts maintained their outperform rating reflecting expected strong free cash flow generation, supporting a robust pace of share buybacks.

Methanol prices in China have trended lower recently due to healthy inventory levels and weak sentiment, but IHS Markit expects the start-up of a new MTO facility in China should increase demand and support higher prices in the second half of the year.

The analysts revised their 2022 and 2023 Adjusted EBITDA estimates to $1.108 billion and $1.064 billion, respectively (from $1.154 billion and $1.076 billion, respectively).