Methanex Corporation Common Stock (MEOH)

FairStock Score: 25/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital and sell at a discount to intrinsic value. Methanex is a commodity chemical producer of methanol and ammonia, with some terminal and storage integration. In fiscal Q2 2026, it reported $1.4B of revenue and $197.8M of net income, a 14.18% margin—respectable for a chemical producer. Trailing free cash flow is $936.3M, a 20.2% FCF yield on the $4.6B market cap, and the Piotroski F-Score is a perfect 9/9, so recent cash generation and accounting signals are strong. But the quality case is weaker: FairStock calculations show ROE of 6.09%, ROCE of 6.50%, and debt-to-equity of 1.09. Returns on capital are barely adequate, and the Altman Z-Score of 1.58 signals financial risk. Valuation is split. At the 2026-10-13 close of $63.12, FairStock shows P/E of 71.73, P/B of 1.90, and a Graham Number of $25.62, leaving a margin of safety of -146.37%. Those are not Graham-style bargain numbers. On the other hand, EV/EBITDA is 7.33 and PEG is 0.35, suggesting the cash flow and growth numbers are less demanding. The missing Lynch category—none, with 0 years of filed results versus the required 3—reminds me that history is short. Methanex is a cyclical, capital-intensive commodity business with a modest moat from logistics, not a wide-moat compounder. The strong free cash flow is real, but low returns, high leverage, and the price relative to Graham value keep me cautious.

In plain English: Methanex makes and sells methanol and ammonia, basic chemicals used by other producers, and also owns storage and terminal facilities. In its latest reported quarter, fiscal Q2 2026, it earned $197.8 million on $1.4 billion of revenue, and its cash flow looks strong. But the business earns low profits relative to its asset base and uses a lot of debt, and at $63.12 the stock looks expensive compared with reported earnings and a conservative estimate of its worth.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer