Why Is Methanex (MEOH) Down 15.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Methanex (MEOH). Shares have lost about 15.3% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Methanex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Methanex’s Q4 Earnings Outpace Estimates, Revenues MissMethanex reported a fourth-quarter 2024 net income of $45 million or 67 cents per share, an increase from the prior-year quarter’s profits of $33 million or 50 cents per share. Adjusted earnings per share rose to $1.24 from the year-ago quarter’s 52 cents. The figure surpassed the Zacks Consensus Estimate of $1.01. Net sales in the quarter stood at $949 million, missing the Zacks Consensus Estimate of $1,023.7 million. However, revenues displayed growth of roughly 3% from the year-ago quarter’s results.Adjusted EBITDA in the reported quarter climbed 105.7% year over year to $216 million.Operational HighlightsProduction in the quarter was 1,868,000 tons, up around 5% year over year. Production was driven by higher production in Chile, New Zealand, Geismar and Egypt. The sales volume for the reported quarter was 2,564,000 tons, down around 10% year over year and below our estimate of 2,727,000 tons. The average realized price per ton of methanol increased from $356 in the previous quarter and $322 in the year-ago quarter to $370, beating our estimate of $368. The increase can be attributed to stable global demand on a backdrop of tight market conditions from lower supply compared to the previous quarter.FY24 ResultsNet sales for 2024 were $3,720 million, down from $3,723 million for the same period in 2023. Adjusted earnings for the full year were $3.72 per share, rising from $2.25 per share in 2023. FinancialsIn 2024, Methanex returned $50 million to shareholders through regular dividends and the $300 million bond due in December was repaid with cash flows generated from operations. The fourth quarter saw an operating cash flow of $281 million. Methanex ended the year with $892 million in cash.OutlookThe company’s production guidance for 2025 is approximately 7.5 million tons (Methanex interest), which excludes any additional production from OCI assets after the acquisition closing date. Actual production may vary quarterly based on gas availability, turnarounds, unplanned outages and unanticipated events.In the first quarter of 2025, significantly higher adjusted EBITDA is expected compared to the fourth quarter, with produced sales expected to be near the production levels in the fourth quarter of 2024 and a higher average realized price. The expected average realized price range is between approximately $395 to $405 per ton for January and February.  How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.The consensus estimate has shifted 17.02% due to these changes.VGM ScoresCurrently, Methanex has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Methanex Corporation (MEOH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks