Can Methanex's (TSX:MX) Production Surge Offset Lower Methanol Prices in Its Long-Term Strategy?

• Methanex Corporation recently reported third quarter 2025 results, highlighting a sharp increase in production to 2,679,000 tonnes and sales volume of 5,544,000 tonnes for the nine months ended September 30, due to integration of the Beaumont and Natgasoline facilities.
• An interesting insight is that despite producing more and generating US$184 million in operating cash flow, Methanex recorded a quarterly net loss and slightly lower sales revenue, reflecting the impact of lower methanol prices and acquisition integration costs.
• We'll explore how this surge in production capacity and management's upbeat EBITDA outlook could influence Methanex's longer-term investment narrative.

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Methanex Investment Narrative Recap

To own Methanex stock, an investor generally needs to believe in global methanol demand growth, successful integration of recent acquisitions, and management’s ability to unlock cost and operational synergies. The recent surge in production, while impressive, has not materially diminished the company’s primary short-term catalyst, a sustainable rebound in methanol prices. The biggest immediate risk remains cost pressure and execution risk around asset integration rather than any significant shift in market fundamentals due to this news.

The most relevant announcement is the company’s production guidance for 2025, projecting output of roughly 8.0 million tonnes due to the newly integrated assets. This is closely tied to the catalyst of achieving economies of scale and increased operational efficiency, both of which are crucial to offsetting lower methanol prices and buttressing profitability as integration progresses. Such operational milestones feed directly into the near-term investment thesis.

However, despite the positive outlook on production capacity, investors should be aware of persistent risks related to...

Read the full narrative on Methanex (it's free!)

Methanex's narrative projects $4.6 billion in revenue and $421.9 million in earnings by 2028. This requires 6.9% yearly revenue growth and a $257.9 million earnings increase from the current earnings of $164.0 million.

Uncover how Methanex's forecasts yield a CA$75.66 fair value, a 37% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have posted three fair value estimates for Methanex, ranging from CA$56 to CA$107 per share. With asset integration still presenting key execution risks, you can see how opinions within the market can widely differ depending on individual outlooks and risk tolerance.

Explore 3 other fair value estimates on Methanex - why the stock might be worth as much as 94% more than the current price!

Build Your Own Methanex Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Methanex research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Methanex research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Methanex's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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