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1. Company Snapshot

1.a. Company Description

Methanex Corporation produces and supplies methanol in North America, the Asia Pacific, Europe, and South America.The company also purchases methanol produced by others under methanol offtake contracts and on the spot market.In addition, it owns and leases storage and terminal facilities.


The company owns and manages a fleet of approximately 30 ocean-going vessels.It serves chemical and petrochemical producers.Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.

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1.b. Last Insights on MX

Methanex's recent performance was driven by margin expansion, with net profit margins reaching 7%, up from 4.1% last year. Revenue is forecast to grow 7.1% per year, beating the Canadian market's 5% annual growth. RBC Capital Markets and UBS maintained their outperform and buy ratings, with price targets of US$50 and US$48, respectively. A recent gas supply deal may spark a rebound. Additionally, the company's valuation is considered attractive, with a Price-To-Earnings ratio of 10.4x. (Source: RBC Capital Markets, UBS, Tudor, Pickering, Holt)

1.c. Company Highlights

2. Methanex's Q3 2025 Earnings: A Strong Performance Amidst Integration Efforts

Methanex Corporation reported a respectable financial performance in the third quarter of 2025, with an average realized price of $345 per tonne and produced methanol sales of approximately 1.9 million tonnes, generating adjusted EBITDA of $191 million and adjusted net income of $0.06 per share. The company's actual EPS came in at $0.0839, falling short of estimates at $0.748. The newly acquired assets, including the fully owned Beaumont plants and the 50% owned Natgasoline plant, operated at high rates, producing a combined 482,000 tonnes of methanol and 92,000 tonnes of ammonia.

Publication Date: Nov -07

📋 Highlights
  • Adjusted EBITDA & Net Income: Achieved $191M adjusted EBITDA and $0.06 adjusted net income per share in Q3 2025.
  • Production from New Assets: Beaumont and Natgasoline plants produced 482,000 tonnes methanol and 92,000 tonnes ammonia, operating at high rates.
  • Chinese MTO Demand Recovery: Methanol-to-olefins demand reached ~90% utilization by Q3 end, driven by increased Iranian imports.
  • Q4 Price & EBITDA Outlook: Forecasts $335–$345/tonne average realized price and higher adjusted EBITDA in Q4 2025 despite slightly lower pricing.
  • Deleveraging Strategy: $413M cash on hand post-Q3; $350M remaining on Term Loan A repayment target, prioritizing debt reduction to 2.5x–3x EBITDA.

Operational Highlights

The company's production in the third quarter was higher compared to the second quarter, driven by the full contribution from the new assets and higher production from Geismar, Medicine Hat, and New Zealand. Methanex expects to operate both the Beaumont and the Natgasoline facilities at high rates through to April 2026. The Chile IV plant is also expected to operate at full rates through to April 2026, while the New Zealand plant restarted in early July after a temporary idling of the operations.

Financial Position and Outlook

Methanex closed the OCI acquisition in late June, using proceeds from the bond issued in 2024 and borrowing $550 million under the Term Loan A facility. The company repaid $125 million of the Term Loan A facility with its cash flow from operations and ended the third quarter in a strong cash position with $413 million on the balance sheet. Based on its fourth quarter European posted price, Methanex's October and November average realized price is forecasted to be between $335 and $345 per tonne, with a meaningful uplift in adjusted EBITDA expected in the fourth quarter.

Valuation and Growth Prospects

With a P/E Ratio of 9.7 and an EV/EBITDA of 6.0, Methanex's valuation appears reasonable, considering the company's strong asset base and plans to continue deleveraging with the help of free cash flows. Analysts estimate next year's revenue growth at 12.4%, indicating a positive outlook for the company's top line. The company's ROIC of 6.56% and ROE of 11.23% also suggest a decent return on investment.

Integration Strategy and Synergies

Methanex has an 18-month integration plan in place to ensure the company fully realizes the expected benefits of the OCI acquisition. The company anticipates $30 million in synergies, primarily from IT-related, insurance, and logistics optimization. As Rich Sumner, the company's representative, mentioned, the focus is on achieving above-deal value results, which are already being achieved in some assets.

3. NewsRoom

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Assessing Methanex (TSX:MX) Valuation After New Biomethanol Service At Immingham Port

Feb -14

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Is Methanex (MEOH) Outperforming Other Basic Materials Stocks This Year?

Feb -12

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MEOH & Partners Launch U.K.'s First Biomethanol Bunkering Service

Feb -11

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U.K.’s First Commercial Biomethanol Bunkering Service Launches at Port of Immingham

Feb -10

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Is Methanex (TSX:MX) Pricing Look Interesting After Mixed Recent Share Performance

Feb -10

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Does Methanex’s Dividend Amid Margin Concerns Reveal a Shifting Playbook for TSX:MX Investors?

Feb -10

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Methanex Downgraded to Neutral at CIBC Following Share Price Rise; Price Target Raised to US$52.00

Feb -06

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3 Chemical Stocks Poised to Outshine Q4 Earnings Estimates

Feb -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.70%)

6. Segments

Methanol

Expected Growth: 4.7%

Methanex Corporation's 4.7% growth in methanol production is driven by increasing demand from the energy sector, particularly in China, and the growing use of methanol as a clean energy source. Additionally, the company's strategic expansion into new markets, such as the production of bio-methanol, and its focus on operational efficiency also contribute to its growth.

7. Detailed Products

Methanol

A chemical used as a raw material in the production of various products such as adhesives, foams, and plastics.

DiMethyl Ether (DME)

A clean-burning fuel that can be used as a substitute for diesel fuel and liquefied petroleum gas (LPG).

MTBE (Methyl Tertiary Butyl Ether)

A gasoline additive used to increase the octane rating of gasoline and reduce emissions.

Acetic Acid

A chemical used in the production of vinyl acetate monomer (VAM), which is used to make a variety of products such as adhesives, coatings, and textiles.

Formaldehyde

A chemical used in the production of resins, adhesives, and other products.

8. Methanex Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Methanex Corporation faces moderate threat from substitutes, as there are limited alternatives to methanol, but some industries may opt for alternative chemicals or fuels.

Bargaining Power Of Customers

Methanex Corporation has a diverse customer base, and no single customer accounts for a significant portion of its revenue, reducing the bargaining power of customers.

Bargaining Power Of Suppliers

Methanex Corporation relies on natural gas as its primary feedstock, and the bargaining power of suppliers is moderate due to the availability of natural gas from various sources.

Threat Of New Entrants

The threat of new entrants is low due to the high capital costs and regulatory barriers associated with entering the methanol production industry.

Intensity Of Rivalry

The methanol production industry is highly competitive, with several established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.95%
Debt Cost 3.95%
Equity Weight 39.05%
Equity Cost 13.49%
WACC 7.67%
Leverage 156.09%

11. Quality Control: Methanex Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Westlake Chemical Partners

A-Score: 6.7/10

Value: 8.6

Growth: 3.1

Quality: 6.5

Yield: 10.0

Momentum: 2.0

Volatility: 10.0

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Lundin Gold

A-Score: 6.5/10

Value: 1.9

Growth: 9.1

Quality: 8.2

Yield: 6.0

Momentum: 10.0

Volatility: 4.0

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Methanex

A-Score: 4.5/10

Value: 8.3

Growth: 4.2

Quality: 4.6

Yield: 3.0

Momentum: 2.5

Volatility: 4.7

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Huntsman

A-Score: 4.1/10

Value: 7.5

Growth: 1.4

Quality: 2.3

Yield: 9.0

Momentum: 0.0

Volatility: 4.3

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Tronox

A-Score: 3.8/10

Value: 9.0

Growth: 3.0

Quality: 1.4

Yield: 8.0

Momentum: 0.0

Volatility: 1.3

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Celanese

A-Score: 3.6/10

Value: 9.4

Growth: 3.1

Quality: 3.2

Yield: 2.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

67.48$

Current Price

67.48$

Potential

-0.00%

Expected Cash-Flows