Tudor, Pickering, Holt on Thursday maintained its buy rating on the shares of Methanex (MX.TO, MEOH) with a US$44.00 price target ahead of the methanol producer's investor day.
"We expect a generally positive update, although no major announcements, during MEOH's Investor Day in Toronto today. Likely topics will include (1) A review of the recently-acquired OCI methanol and ammonia assets, (2) A look at opportunities to take share in low-carbon shipping, (3) An analysis of dynamics affecting global methanol supply/demand, including limiting capacity growth going forward and incremental demand from new MTO assets, and (4) Questions on MEOH's assets in regions like New Zealand, Trinidad, and Chile that face limitations on natgas feedstock supply. Finally, comments on capital allocation will also be important for investors. In the near-term, the gameplan is straightforward-use cash flows from the company's appealing 20% FCF to equity and 9% FCF to EV yields to pay down debt (3.8x net leverage). In the longer-term, investors will be interested to hear whether MEOH plans further growth (either organic or M&A) or to increase capital returns to shareholders. Maintain Buy," analyst Matthew Blair wrote.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 53.72, Change: -0.35, Percent Change: -0.65
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