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Methanex (MEOH) Shares Up 31% YTD: What's Driving the Stock?
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Shares of Methanex Corporation (MEOH - Free Report) have shot up around 31% so far his year. The company has also significantly outperformed its industry’s decline of roughly 5% to over the same time frame.
Methanex, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $6.3 billion and average volume of shares traded in the last three months was around 389.2K. The company has an expected long-term earnings per share growth rate of 15%, higher than the industry average of 11.7%.
Let’s take a look into the factors that are driving this chemical company.
What’s Working in Favor of MEOH?
Strong demand and pricing fundamentals for methanol are contributing to the rally in Methanex’s shares. The company is benefiting from higher demand and prices for methanol.
Demand has been driven by both traditional derivatives and energy-related applications in Asia, particularly in China. Per the company, global demand for methanol increased 4% year over year in the second quarter of 2018 and is expected to remain healthy in 2018.
Moreover, higher methanol prices are boosting the company’s revenues and margins. In the second quarter, the company’s average realized prices for methanol climbed roughly 24% year over year.
Moreover, Methanex remains on track with its plans of capitalizing on near-term growth opportunities in Chile. Methanex’s Chile IV plant is progressing with its restart process which is expected to be complete by the end of third-quarter 2018.
With a committed revolving credit facility, strong balance sheet and healthy cash generation capability, the company believes that it is well positioned to meet its financial commitments, execute growth opportunities and return excess cash to shareholders through dividends and share repurchases.
Earnings estimates for Methanex have also moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2018 has increased by around 13.5% to $7.30. The Zacks Consensus Estimate for third-quarter 2018 has also shot up 101% over the same timeframe to $2.01.
The Zacks Consensus Estimate for earnings for 2018 reflects an expected year-over-year growth of 55%. For the third quarter, earnings are expected to rise a whopping 235% year over year.
Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 69% in a year.
Celanese has an expected long-term earnings growth rate of 10%. The company’s shares have gained around 12% in a year.
Huntsman has an expected long-term earnings growth rate of 8.5%. The company’s shares have gained around 7% in a year.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Methanex (MEOH) Shares Up 31% YTD: What's Driving the Stock?
Shares of Methanex Corporation (MEOH - Free Report) have shot up around 31% so far his year. The company has also significantly outperformed its industry’s decline of roughly 5% to over the same time frame.
Methanex, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $6.3 billion and average volume of shares traded in the last three months was around 389.2K. The company has an expected long-term earnings per share growth rate of 15%, higher than the industry average of 11.7%.
Let’s take a look into the factors that are driving this chemical company.
What’s Working in Favor of MEOH?
Strong demand and pricing fundamentals for methanol are contributing to the rally in Methanex’s shares. The company is benefiting from higher demand and prices for methanol.
Demand has been driven by both traditional derivatives and energy-related applications in Asia, particularly in China. Per the company, global demand for methanol increased 4% year over year in the second quarter of 2018 and is expected to remain healthy in 2018.
Moreover, higher methanol prices are boosting the company’s revenues and margins. In the second quarter, the company’s average realized prices for methanol climbed roughly 24% year over year.
Moreover, Methanex remains on track with its plans of capitalizing on near-term growth opportunities in Chile. Methanex’s Chile IV plant is progressing with its restart process which is expected to be complete by the end of third-quarter 2018.
With a committed revolving credit facility, strong balance sheet and healthy cash generation capability, the company believes that it is well positioned to meet its financial commitments, execute growth opportunities and return excess cash to shareholders through dividends and share repurchases.
Earnings estimates for Methanex have also moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2018 has increased by around 13.5% to $7.30. The Zacks Consensus Estimate for third-quarter 2018 has also shot up 101% over the same timeframe to $2.01.
The Zacks Consensus Estimate for earnings for 2018 reflects an expected year-over-year growth of 55%. For the third quarter, earnings are expected to rise a whopping 235% year over year.
Methanex Corporation Price and Consensus
Methanex Corporation Price and Consensus | Methanex Corporation Quote
Stocks to Consider
Stocks worth considering in the basic materials space include Ingevity Corporation (NGVT - Free Report) , Celanese Corporation (CE - Free Report) and Huntsman Corporation (HUN - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 69% in a year.
Celanese has an expected long-term earnings growth rate of 10%. The company’s shares have gained around 12% in a year.
Huntsman has an expected long-term earnings growth rate of 8.5%. The company’s shares have gained around 7% in a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>