Methanex Retains Its Hold Rec

Methanex Corp. (MEOH - Analyst Report) is the world’s largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America.

On October 22, Methanex reported third quarter results for 2008. For the reported quarter, earnings were $0.75 per diluted share compared to $0.24 in the comparable quarter in 2007. The average realized price for the third quarter of 2008 was $413 per ton compared with $270 per ton for the third quarter of 2007. Revenue increased by 44% to $570 million in the reported quarter.

Methanex is currently valued at 5.1x our 2008 earnings of $2.44, which is at a sharp discount to the industry median of 10.2x. We believe that the stock should trade at 5.3x our 2008 earnings. This implies a $13 target and thus a Hold rating.

Read the full analyst report on MEOH