We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Methanex (MEOH) Up 26% in 6 Months: What's Behind the Rally?
Read MoreHide Full Article
Shares of Methanex Corporation (MEOH - Free Report) have shot up around 26% over the past six months, significantly outperforming the industry’s decline of roughly 4%.
Methanex, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $6 billion and average volume of shares traded in the last three months was around 430K. The company has an expected long-term earnings per share growth rate of 15%, higher than the industry average of 11.3%.
Let’s take a look into the factors that are driving this chemical company.
Driving Factors
Forecast-topping second-quarter earnings performance and strong demand and pricing fundamentals for methanol have contributed to the run up in Methanex’s shares. Demand for methanol 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.
The company’s profits jumped around 32% year over year to $111 million or $1.36 per share in the second quarter. Adjusted earnings of $1.75 per share topped the Zacks Consensus Estimate of $1.70. Revenues also surged roughly 42% year over year to $950 million in the quarter on the back of higher prices.
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 month, 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 third-quarter 2018, earnings are expected to rise a whopping 235% year over year.
Stocks worth considering in the basic materials space include Celanese Corporation (CE - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 18% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1. The company’s shares have rallied around 22% in a year.
Air Products has an expected long-term earnings growth rate of 16.2% and carries a Zacks Rank #2 (Buy). Its shares have gained roughly 14% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Methanex (MEOH) Up 26% in 6 Months: What's Behind the Rally?
Shares of Methanex Corporation (MEOH - Free Report) have shot up around 26% over the past six months, significantly outperforming the industry’s decline of roughly 4%.
Methanex, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $6 billion and average volume of shares traded in the last three months was around 430K. The company has an expected long-term earnings per share growth rate of 15%, higher than the industry average of 11.3%.
Let’s take a look into the factors that are driving this chemical company.
Driving Factors
Forecast-topping second-quarter earnings performance and strong demand and pricing fundamentals for methanol have contributed to the run up in Methanex’s shares. Demand for methanol 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.
The company’s profits jumped around 32% year over year to $111 million or $1.36 per share in the second quarter. Adjusted earnings of $1.75 per share topped the Zacks Consensus Estimate of $1.70. Revenues also surged roughly 42% year over year to $950 million in the quarter on the back of higher prices.
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 month, 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 third-quarter 2018, 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 Celanese Corporation (CE - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 18% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1. The company’s shares have rallied around 22% in a year.
Air Products has an expected long-term earnings growth rate of 16.2% and carries a Zacks Rank #2 (Buy). Its shares have gained roughly 14% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>