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Methanex Hits 52-Week High: What's Driving the Stock?

Shares of Methanex CorporationMEOH touched a fresh 52-week high of $46.95 on Dec 12, eventually closing lower at $45.50.

Methanex has a market cap of roughly $4.1 billion and average volume of shares traded in the last three months is around 736.4K.

Methanex has outperformed the Zacks categorized Chemical industry in the past three months. The company's shares have gained 55.6% in this period, compared with a 6.7% gain recorded by the industry.

Driving Factors

Methanex's loss per share of 12 cents per share for third-quarter 2016 was narrower than the Zacks Consensus Estimate of a loss of 21 cents. Revenues of $510 million beat the Zacks Consensus Estimate of $505 million.

Methanex is seeing healthy global demand for methanol. Demand fundamentals for methanol remain healthy despite the global economic weakness and a few near-term challenges. Demand has been primarily driven by both traditional derivatives and energy-related applications in Asia, particularly in China.

Methanex estimates an around 10% year over year growth in total methanol demand (to roughly 16.8 million tons) for third-quarter 2016. It saw solid chemical demand in the quarter, buoyed by strong demand from conventional chemical applications.

Methanex has completed the relocation of its Chilean plants to the U.S. Gulf Coast at a site in Geismar, LA. The Geismar project offers excellent return potential. The company gains from competitive natural gas prices and an excellent business environment in Geismar with extensive infrastructure and significant methanol demand nearby. The company anticipates executing the methanol project with significantly less capital.

Methanex has forged a ten-year supply pact with Oklahoma-based natural gas producer Chesapeake Energy Corporation. Under the agreement, Chesapeake is providing natural gas for the Geismar plant. The agreement lowers Methanex's exposure to short-term methanol price changes.

The company remains committed to boost shareholder returns leveraging its strong liquidity position. Methanex returned $25 million in cash to shareholders in the form of dividend in the most recent quarter.

Methanex carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other well-placed companies in the chemical space include Koppers Holdings Inc. KOP , The Chemours Company CC and Kronos Worldwide, Inc. KRO , all sporting a Zacks Rank #1 (Strong Buy). You can the complete list of today's Zacks #1 Rank stocks here .

Koppers Holdings has an expected long-term growth of 10%.

Chemours has an expected long-term growth of around 15.5%.

Kronos Worldwide has an expected long-term growth of around 5%.

METHANEX CORP Price and Consensus

METHANEX CORP Price and Consensus | METHANEX CORP Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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