UBS on Thursday reiterated its buy rating on the shares of Methanex (MX.TO, MEOH) and its US$48.00 price target after the methanol producer reported third-quarter results.

"We think Methanex EBITDA was in-line to slightly below 3Q expectations. 3Q EBITDA was impacted by inventory timing lag, which meant no profits on ~1/2 of OCI tons produced during the quarter (will flow into 4Q sales). We don't think consensus fully adjusted to this, and most that had were in the $185-195M range, vs MEOH reported $191M in EBITDA. Self produced tons sold were slightly better than UBSe while realized pricing was ~$5/MT better as well, so there was some delta in the cost line which led to EBITDA slightly below our expectations. Forward production guidance of ~8mil tons (incl ammonia) was maintained, while initial expectations for 4Q realized pricing is ~$5/MT below what we modeled. Net, this reduces our 4Q EBITDA to $233M vs $241M consensus. Overall we'd expect a slight negative reaction on lower 3Q/4Q, but MEOH shares have already reacted to the decline in methanol prices we've seen recently. We expect that 4Q will give investors a better view of MEOH combined earnings power post OCI and importantly higher FCF," the investment bank wrote.

(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: 49.58, Change: +2.08, Percent Change: +4.38