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Methanex (MEOH) Shares Jump 28% in 6 Months: Here's Why
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Shares of Methanex Corporation (MEOH - Free Report) have rallied 28.2% in the past six months compared with the industry’s rise of 6.7%. The stock has also topped the S&P 500’s 10.1% rise over the same period.
Image Source: Zacks Investment Research
Let’s dive into the factors behind this currently Zacks Rank #3 (Hold) stock’s price appreciation.
What’s Driving the Stock?
Methanex is benefiting from higher methanol prices brought about by the methanol industry-supply challenges. MEOH expects methanol prices to be significantly higher in fourth-quarter 2021. Increased prices are expected to aid its bottom line.
MEOH recently restarted constructing its Geismar 3 project, which is expected to boost its asset portfolio and future cash generation, while promising long-term value to its shareholders. Its strong liquidity position and cash flow generation will fund Geismar 3.
The production resumption at its Chile 4 plant in early October 2021 is also anticipated to ramp up its December-quarter production. The restart of its Motunui plant in New Zealand during late August and the benefits from the debottlenecking project are expected to lead to a considerably higher adjusted EBITDA, sequentially, in the fourth quarter of 2021.
MEOH also remains committed to boost its balance sheet and maintain liquidity. It ended the third quarter with a strong liquidity position of more than $900 million worth cash and $900 million of undrawn backup liquidity. Cash flow from operating activities was $301 million, increasing more than eight folds year over year. Methanex paid out dividends worth $10 million during the quarter.
Key Picks
Some better-ranked stocks from the basic materials space are Orion Engineered Carbons (OEC - Free Report) , Commercial Metals Company (CMC - Free Report) , and AdvanSix Inc. (ASIX - Free Report) .
Orion flaunts a Zacks Rank #1 (Strong Buy) at present. OEC has an expected earnings growth rate of 27.3% for the current year. The consensus estimate for OEC’s current year earnings has been revised 6.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Orion’s bottom line beat the Zacks Consensus Estimate in all the last four quarters. OEC has a trailing four-quarter earnings surprise of 18.24%, on average. The stock has gained 3.3% in a year.
Commercial Metals sports a Zacks Rank of 1 at present. CMC has an expected earnings growth rate of 10.5% for the current fiscal year. The consensus estimate for CMC's current fiscal-year earnings has been revised 6.6% upward over the past 60 days.
Commercial Metals’ bottom line beat the Zacks Consensus Estimate in three of the last four quarters while the same missed the mark once. CMC has a trailing four-quarter earnings surprise of 7.4%, on average. The stock has rallied around 60% in a year.
AdvanSix has a projected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 1.6% upward in the past 60 days.
ASIX’s bottom line beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 46.9%. AdvanSix has rallied 111.1% in a year. The stock currently carries a Zacks Rank #2 (Buy).
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Methanex (MEOH) Shares Jump 28% in 6 Months: Here's Why
Shares of Methanex Corporation (MEOH - Free Report) have rallied 28.2% in the past six months compared with the industry’s rise of 6.7%. The stock has also topped the S&P 500’s 10.1% rise over the same period.
Let’s dive into the factors behind this currently Zacks Rank #3 (Hold) stock’s price appreciation.
What’s Driving the Stock?
Methanex is benefiting from higher methanol prices brought about by the methanol industry-supply challenges. MEOH expects methanol prices to be significantly higher in fourth-quarter 2021. Increased prices are expected to aid its bottom line.
MEOH recently restarted constructing its Geismar 3 project, which is expected to boost its asset portfolio and future cash generation, while promising long-term value to its shareholders. Its strong liquidity position and cash flow generation will fund Geismar 3.
The production resumption at its Chile 4 plant in early October 2021 is also anticipated to ramp up its December-quarter production. The restart of its Motunui plant in New Zealand during late August and the benefits from the debottlenecking project are expected to lead to a considerably higher adjusted EBITDA, sequentially, in the fourth quarter of 2021.
MEOH also remains committed to boost its balance sheet and maintain liquidity. It ended the third quarter with a strong liquidity position of more than $900 million worth cash and $900 million of undrawn backup liquidity. Cash flow from operating activities was $301 million, increasing more than eight folds year over year. Methanex paid out dividends worth $10 million during the quarter.
Key Picks
Some better-ranked stocks from the basic materials space are Orion Engineered Carbons (OEC - Free Report) , Commercial Metals Company (CMC - Free Report) , and AdvanSix Inc. (ASIX - Free Report) .
Orion flaunts a Zacks Rank #1 (Strong Buy) at present. OEC has an expected earnings growth rate of 27.3% for the current year. The consensus estimate for OEC’s current year earnings has been revised 6.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Orion’s bottom line beat the Zacks Consensus Estimate in all the last four quarters. OEC has a trailing four-quarter earnings surprise of 18.24%, on average. The stock has gained 3.3% in a year.
Commercial Metals sports a Zacks Rank of 1 at present. CMC has an expected earnings growth rate of 10.5% for the current fiscal year. The consensus estimate for CMC's current fiscal-year earnings has been revised 6.6% upward over the past 60 days.
Commercial Metals’ bottom line beat the Zacks Consensus Estimate in three of the last four quarters while the same missed the mark once. CMC has a trailing four-quarter earnings surprise of 7.4%, on average. The stock has rallied around 60% in a year.
AdvanSix has a projected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 1.6% upward in the past 60 days.
ASIX’s bottom line beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 46.9%. AdvanSix has rallied 111.1% in a year. The stock currently carries a Zacks Rank #2 (Buy).