Methanex (MEOH) is expected to begin share buybacks once it meets its deleveraging target, RBC Capital Markets said in a note emailed Tuesday.

The Iran conflict continues to drive near-term methanol prices higher, enabling Methanex to accelerate debt reduction, the investment firm said.

Supply constraints due to the ongoing Iranian conflict, declining China coastal inventories, and an expected tightening in import availability between September and October could keep global spot prices elevated and support a more gradual return to normalized pricing levels, according to the note.

Methanex shares already reflect the improved company fundamentals and a "higher for longer" methanol price environment, the firm said.

RBC Capital Markets maintained its sector perform rating and $65 price target on the stock.

Price: 58.58, Change: -0.37, Percent Change: -0.63