BMO Capital Markets on Friday reiterated its outperform rating on the shares of Methanex (MX.TO, MEOH) while raising its price target to US$65.00 from an undisclosed prior level following fourth-quarter results from the methanol producer.
"Reiterate Outperform rating and raise target price to US$65. Methanol is tight, the OCI deal seems accretive, consensus estimates are rising, and MEOH is operating well (ex deteriorated gas conditions in New Zealand). Above-consensus 2025E estimates remain generally intact with tweaks, but we are becoming more comfortable pro forma post-OCI FCF is ~$10/sh, as opposed to ~$9, even assuming methanol prices fall from ~$400/t realized (i.e. spot) to more mid-cycle averages (i.e. ~$350/t). Our target is ~7x 2026E EV/EBITDA (full year with OCI but assuming methanol ASP retreats to ~$350/t)," analyst Joel Jackson wrote.
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