A month has gone by since the last earnings report for Methanex (MEOH). Shares have added about 5.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Methanex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Methanex's Earnings & Sales Surpass Estimates in Q3
Methanex logged third-quarter 2023 adjusted earnings of 2 cents per share compared with 69 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of a loss of 8 cents.
Revenues declined around 18.7% year over year to $823 million in the quarter. However, the top line beat the Zacks Consensus Estimate of $779.2 million.
Adjusted EBITDA in the reported quarter fell 45.3% year over year to $105 million.
Production in the quarter totaled 1,545,000 tons, up around 23.4% year over year. The figure was below our estimate of 1,556,000 tons. Total sales volume in the third quarter was 2,720,000 tons, higher than the prior-year quarter’s figure of 2,677,000 tons. The figure surpassed our estimate of 2,359,000 tons.
The average realized price for methanol was $303 per ton, down from $377 in the prior-year quarter. The figure was below our estimate of $316 per ton.
Cash flow from operating activities was $106 million. The company paid out $12 million in regular dividends to shareholders and concluded the third quarter with $529 million in cash.
Methanex anticipates that actual production in 2023 will be somewhat higher than the production outlook of about 6.5 million equity tons, excluding any G3 output. Actual output may vary per quarter due to turnaround timing, gas availability, unscheduled outages and unanticipated events, the company noted.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 58.79% due to these changes.
Currently, Methanex has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Estimates 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.
Performance of an Industry Player
Methanex is part of the Zacks Chemical - Diversified industry. Over the past month, Dow Inc. (DOW), a stock from the same industry, has gained 7%. The company reported its results for the quarter ended September 2023 more than a month ago.
Dow Inc. reported revenues of $10.73 billion in the last reported quarter, representing a year-over-year change of -24%. EPS of $0.48 for the same period compares with $1.11 a year ago.
For the current quarter, Dow Inc. is expected to post earnings of $0.39 per share, indicating a change of -15.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -22.8% over the last 30 days.
Dow Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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