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Here's Why You Should Hold Onto MEOH Stock for Now
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Key Takeaways
Methanex shares surged 56.5% in a year as expanded capacity and the OCI acquisition boosted production.
Geismar hit record second-quarter output, while OCI assets operate above deal-valuation assumptions.
MEOH faces gas constraints, weak demand, lower realized pricing and elevated shipping costs.
Methanex Corporation’s (MEOH - Free Report) shares have surged 56.5% in the past year on the back of expanded capacity and the OCI acquisition that expanded its North American production base. Meanwhile, persistent feedstock and operating limitations paired with Middle East conflict pose challenges. The Zacks Chemical - Diversified industry declined 1.8% during the same period.
Image Source: Zacks Investment Research
Let’s find out why MEOH stock is worth retaining at the moment.
Expanded Capacity and OCI Integration Support Long-Term Growth
Methanex is strengthening its long-term performance through expanded North American capacity. Its Geismar platform’s production has been scaled and is already reaping the benefits of higher production, with the site producing a record 1.027 million tons in the second quarter of 2026, up from 934,000 tons in the first quarter, as all three plants operated at high rates. Management targets roughly 4 million tons of annual production at Geismar at a 97% reliability rate between turnaround cycles, supporting higher volumes.
The OCI acquisition has further expanded the North American production base through Beaumont and Methanex’s 50% interest in Natgasoline. Both assets are operating above deal-valuation assumptions, while $30 million of hard synergies remain on track by year-end 2026. Meanwhile, Chilean and Argentine gas contracts provide a healthy run rate through 2030 and 2027, respectively.
Gas Constraints and Demand Weakness Reduce Visibility
Methanex continues to face operational constraints and dampened market conditions. New Zealand production declined to 46,000 tons in the second quarter from 158,000 tons in the first quarter following a planned winter outage, while production in Chile fell as the company shifted to one plant during winters.
The Middle East conflict has added further uncertainty, disrupted supply chains and raised costs. The management estimated demand to be 5%-10% below normal seasonal levels, with coastal Chinese methanol-to-olefins (MTO) operating rates at only 30%-40% versus 80%-90% a year earlier. Realized pricing for July and August is expected at $460-$485 per ton, below $529 in the second quarter, creating pressure on third-quarter EBITDA. Elevated shipping costs continue to weigh on margins and limit earnings potential.
MEOH’s Zacks Rank & Key Picks
MEOH currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $22.23 per share, indicating a 55.89% year-over-year increase. RS’shares have gained 33.1% over the past year.
The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $12.92 per share, indicating a rise of 20.07% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.
The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 11.5% over the past year.
View the Zacks #1 Rank List
Image: Shutterstock
Here's Why You Should Hold Onto MEOH Stock for Now
Key Takeaways
Methanex Corporation’s (MEOH - Free Report) shares have surged 56.5% in the past year on the back of expanded capacity and the OCI acquisition that expanded its North American production base. Meanwhile, persistent feedstock and operating limitations paired with Middle East conflict pose challenges. The Zacks Chemical - Diversified industry declined 1.8% during the same period.
Image Source: Zacks Investment Research
Let’s find out why MEOH stock is worth retaining at the moment.
Expanded Capacity and OCI Integration Support Long-Term Growth
Methanex is strengthening its long-term performance through expanded North American capacity. Its Geismar platform’s production has been scaled and is already reaping the benefits of higher production, with the site producing a record 1.027 million tons in the second quarter of 2026, up from 934,000 tons in the first quarter, as all three plants operated at high rates. Management targets roughly 4 million tons of annual production at Geismar at a 97% reliability rate between turnaround cycles, supporting higher volumes.
The OCI acquisition has further expanded the North American production base through Beaumont and Methanex’s 50% interest in Natgasoline. Both assets are operating above deal-valuation assumptions, while $30 million of hard synergies remain on track by year-end 2026. Meanwhile, Chilean and Argentine gas contracts provide a healthy run rate through 2030 and 2027, respectively.
Gas Constraints and Demand Weakness Reduce Visibility
Methanex continues to face operational constraints and dampened market conditions. New Zealand production declined to 46,000 tons in the second quarter from 158,000 tons in the first quarter following a planned winter outage, while production in Chile fell as the company shifted to one plant during winters.
The Middle East conflict has added further uncertainty, disrupted supply chains and raised costs. The management estimated demand to be 5%-10% below normal seasonal levels, with coastal Chinese methanol-to-olefins (MTO) operating rates at only 30%-40% versus 80%-90% a year earlier. Realized pricing for July and August is expected at $460-$485 per ton, below $529 in the second quarter, creating pressure on third-quarter EBITDA. Elevated shipping costs continue to weigh on margins and limit earnings potential.
MEOH’s Zacks Rank & Key Picks
MEOH currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .
While RS currently sports a Zacks Rank #1 (Strong Buy), CRS and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $22.23 per share, indicating a 55.89% year-over-year increase. RS’shares have gained 33.1% over the past year.
The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $12.92 per share, indicating a rise of 20.07% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.
The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 11.5% over the past year.