01.13
Methanex Corp. (MX) – $22.92 – Starting 2010 with Higher Methanol Prices; Target Increased to $31.00
Outperform, Above Average Risk, Price Target: $31.00 (prev. $23.00)
The increase to MX’s target price reflects an upward revision to RBC CM’s methanol pricing assumptions. RBC CM increased its Q1/10 methanol price assumption from $288/tonne to $340/tonne, and raised its methanol price estimate for the remainder of the forecast period from $260/tonne to $300/tonne. RBC CM also raised its 2010 and 2011 EPS estimates from $1.32 and $2.68, respectively, to $2.09 and $3.38. The changes reflect the upward revision of methanol pricing assumptions, partially offset by a more conservative ramp-up of production in Chile. RBC CM reduced its Q4/09 EPS estimate by $0.03 as the start-up of the second production unit was slightly later than forecast.
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