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Raymond James has downgraded Methanex Corp. (MX.TO, MEOH) to "market perform" from "outperform" while slashing its price target to $35 from $42. It believes falling oil prices will hurt the company's stock price, which is currently trading down 5.2% at $26.41, comfortably above a 52-week low of $20.64.

“Despite our positive long-term view toward global methanol markets, we are increasingly mindful of the potential impact that retreating oil prices will have on key industry indicators (i.e. Chinese gasoline/naptha prices), and more importantly, the company’s short-term trading valuation,” analyst Steve Hansen said in a note to clients on Tuesday. “In this context, we find it difficult to ignore the stiff headwinds recently put forth by our U.S. Energy Team that call for $65 per barrel oil in 2013. Signals suggesting the Chinese and global economies are slowing also weighed into our decision.”

“For those shareholders firmly committed to Methanex and the industry’s long-term fundamentals (as are we), we would advise they consider hedging out some of the risk associated with our recent energy call, perhaps via an offsetting short position in United States Oil Fund ( USO ), a proxy for oil prices,” he says.

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