Methanex Valuation

Is MEOH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of MEOH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MEOH ($47.47) is trading below our estimate of fair value ($208.38)

Significantly Below Fair Value: MEOH is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MEOH?

Key metric: As MEOH is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for MEOH. This is calculated by dividing MEOH's market cap by their current earnings.
What is MEOH's PE Ratio?
PE Ratio	21x
Earnings	US$152.40m
Market Cap	US$3.20b

MEOH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	10x
PEG Ratio	0.6x

Price to Earnings Ratio vs Peers

How does MEOH's PE Ratio compare to its peers?

The above table shows the PE ratio for MEOH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	31.4x
HWKN Hawkins	34.6x	6.1%	US$2.8b
OLN Olin	31.9x	62.8%	US$4.8b
TROX Tronox Holdings	43.7x	95.1%	US$1.8b
CBT Cabot	15.3x	n/a	US$5.7b
MEOH Methanex	21x	33.3%	US$4.5b

Price-To-Earnings vs Peers: MEOH is good value based on its Price-To-Earnings Ratio (21x) compared to the peer average (31.4x).

Price to Earnings Ratio vs Industry

How does MEOH's PE Ratio compare vs other companies in the US Chemicals Industry?

7 Companies	Price / Earnings	Estimated Growth	Market Cap
FFHL Fuwei Films (Holdings)	2.8x	n/a	US$27.11m
BSLK Bolt Projects Holdings	0.1x	n/a	US$16.82m
BON Bon Natural Life	2.5x	n/a	US$6.07m
GSPI Green Star Products	1.7x	n/a	US$1.64m

7 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: MEOH is good value based on its Price-To-Earnings Ratio (21x) compared to the US Chemicals industry average (22.6x).

Price to Earnings Ratio vs Fair Ratio

What is MEOH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MEOH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	21x
Fair PE Ratio	26.5x

Price-To-Earnings vs Fair Ratio: MEOH is good value based on its Price-To-Earnings Ratio (21x) compared to the estimated Fair Price-To-Earnings Ratio (26.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.