Methanex (MEOH) is benefiting from rising methanol prices due to the Iran conflict that could normalize by year-end, RBC Capital Markets said in a Wednesday note.

With a year-to-date return of 49%, or 17% since the start of the Iran conflict, the shares are reflecting the improving underlying fundamentals, the report said.

The note pointed to possible accelerated deleveraging and share buyback timeline, as well as some methanol pricing upside from the ongoing conflict.

RBC raised its price target to $65 from $55, while downgrading the stock to sector perform from outperform as the shares are increasingly becoming linked to the conflict.

"Our $10 price target increase reflects some elevated near-term methanol prices that could mostly normalize by year-end," the report said.

Price: 59.27, Change: +0.23, Percent Change: +0.39