Tudor, Pickering, Holt on Monday reiterated its buy rating on the shares of Methanex (MX.TO, MEOH) while raising its price target to US$53.00 from US$51.00 on higher methanol prices.

"We raise our Q4'24 EBITDA outlook to $224mm from $219mm (vs $222mm consensus) after MEOH's global average methanol contract price improved +$14/tonne m/m in Dec on the back of a +$47/tonne increase in NAM combined with rollovers in the rest of the regions. MEOH's Q4 contract average is now up +$31/tonne q/q, while spot has climbed +$22/tonne q/q, fueled by a number of outages or reported production disruptions, including Natgasoline, OCI/Beaumont, and MEOH/G3 in the US, Equinor and Mider Helm in Europe, Kaveh, Kimiaye Pars, Zagros, and Sabalan in the Middle East, ENN Inner Mongolia Xinneng in China, and a Venezuelan gas pipeline explosion in South America. Our modeling reflects TPHe $377/tonne realized Q4 price (vs a $365-375/tonne range that MEOH achieved for Oct-Nov) and 1.9mmt of production (vs MEOH guide of 1.9mmt). Despite rolling off $30mm in Egypt insurance proceeds and $45mm in NZ gas sales from Q3, we have MEOH's EBITDA up q/q on stronger volumes and better pricing. We model MEOH paying off nearly $300mm in debt in the quarter and ending the year at 2.9x net leverage. The strong profitability in Q4 along with robust FCF this year and next (TPHe FCF yield of 15% in '24, 18% in '25) will help MEOH prepare for the $2.05B OCI acquisition in mid'25. Maintain Buy, raise target to $53 from $51," analyst Matthew Blair noted.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 66.36, Change: +0.72, Percent Change: +1.10