Raymond James upgraded Methanex (NASDAQ: MEOH ) to Outperform from Market Perform, with a new price target of $60, up from $50 per share, in a note Tuesday.
The firm's analysts said the firm is lifting the stock based on various factors, including methanol finding a floor and spot prices being poised to tighten.
"Spot methanol prices are on the rise after an 18-month protracted slide," they wrote. "Spot prices are poised to tighten further given traditional demand-side factors ( Brent prices, MTO op. rates, China stimulus) & near-term seasonal influences."
The analysts added that G3 is poised to commission next quarter, "providing a significant boost to 2024 EBITDA" and FCF, while "stock buybacks are poised to return in 2024 (& beyond) as a key capital allocation tool."
Raymond James also believes that Street estimates are too low, and Methanex shares represent "solid value at current levels."
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