Methanex (NASDAQ: MEOH) stock rose after its third-quarter results beat estimates and CEO Richard Sumner described "record levels of cash flow generation." Management said adjusted EBITDA should be higher in the fourth quarter than in the third if current pricing holds through December and produced sales volumes are similar. Third-quarter adjusted EBITDA of $543 million had decreased from the second quarter. Consensus EPS for the next report is 2.97, below this quarter's $3.69. The latest quote was $71.57, up 14.04% on Oct. 30, 2026, and 12.62% higher than the close on Oct. 28. The sources we reviewed do not establish the cause of the move, so we show timing only. The angle that matters: this is a cash story, driven by high methanol prices and cheap natural gas, and the key question is how long those conditions last. Figures are current as of Oct. 30, 2026 and cover the quarter ended Sept. 30, 2026.
Key facts
- Oct. 30, 2026: MEOH traded at $71.57, up 14.04% on the day. Its 52-week range is $34.01 to $72.32, so the stock sits near its high.
- Oct. 29, 2026 (earnings): Adjusted EPS (earnings per share) was $3.69 vs. an analyst estimate of $2.84, a beat of $0.85, or 29.9%. Revenue was $1.36B vs. an estimate of $1.29B, a beat of $67.7M, or 5.2%.
- Third quarter ended Sept. 30, 2026: Revenue on the income statement was $1.39B, up 49.6% from the year-ago quarter. Operating income was $396.5M and net income was $265.0M, compared with a net loss of $7.1M a year earlier.
- Third quarter cash flow: Operating cash flow was $646.1M and free cash flow (cash left after capital spending) was $621.7M.
- Balance sheet, Sept. 30, 2026: Cash and short-term investments were $911.7M against total debt of $3.11B, leaving net debt of $2.20B.
- Next earnings date: FMP lists 2027-03-04, with a consensus EPS estimate of 2.97 and a revenue estimate of $1.33B. Management timing differs: Sumner closed the call by inviting listeners to join "in February" for fourth-quarter and annual 2026 results.
What happened
Methanex, the world's largest methanol producer, reported results after the market closed on Oct. 29, 2026 and held its call on Oct. 30. The company's release was titled "Methanex Reports Higher Earnings and Cash Flows in Third Quarter 2026." A Motley Fool article headlined "Why Methanex Stock Triumphed While the Market Tanked Today" ran that day; we reviewed only its headline, not its reasoning.
Three things in the report and call stand out.
1. Results beat estimates. Adjusted EPS and revenue both came in above analyst estimates (see Key facts). One data note: the earnings-surprise feed shows revenue of $1.36B, while the income statement shows $1.39B. We use the first for the estimate comparison and the second for the quarter itself.
2. Cash flow was the headline. Sumner said, "These outstanding operating results drove record levels of cash flow generation for our business." He also said, "Continued strong methanol production, underpinned by attractive natural gas feedstock, in the current methanol price environment is driving very strong cash flow generation for our business."
3. Guidance pointed up, with a caveat. Management said fourth-quarter adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, a rough measure of operating profit) should be higher than in the third quarter. That assumes current pricing holds through December and produced sales volumes are similar to the third quarter. Third-quarter adjusted EBITDA had itself decreased from the second quarter, primarily because of a lower average realized price, partly offset by higher produced sales volumes. For October and November, the company expects an average realized price of roughly $525 to $550 per tonne.
Asked why third-quarter realized pricing seemed better than expected, Sumner pointed to increases in Asia Pacific, including China, with September the highest month. He also pointed to record North American production, with the Geismar and Medicine Hat plants running at full rates. When an analyst said Methanex had benefited from having no turnarounds this year, Sumner confirmed there were none in 2026. The company expects 2026 equity production of approximately 9 million tonnes.
The backdrop, according to the company, is the Middle East conflict. Sumner said it caused a significant loss of industry supply and kept prices strong. The release also noted a newly approved share repurchase program, which the company said was announced after the quarter ended. The release also said it is redeeming existing bonds early.
Why it matters for investors
The margin jump is large, and it is recent. The table shows why the story is about cash and margins more than revenue.
| Quarter ended | Revenue | Gross margin | Operating margin | Net income | Free cash flow | |---|---|---|---|---|---| | Sept. 30, 2025 | $927.4M | 19.3% | 7.4% | net loss of $7.1M | $119.2M | | Dec. 31, 2025 | $968.8M | 20.5% | 7.4% | net loss of $88.8M | $159.3M | | March 31, 2026 | $973.7M | 20.9% | 8.6% | net loss of $13.6M | $109.7M | | June 30, 2026 | $1.40B | 45.7% | 37.1% | net income of $197.8M | $351.4M | | Sept. 30, 2026 | $1.39B | 37.0% | 28.6% | net income of $265.0M | $621.7M |
The table shows that margins stepped up sharply in the second quarter of 2026 and stayed far above the earlier quarters in the third, while free cash flow kept climbing. Margins did fall from the second quarter, though: gross margin went from 45.7% to 37.0% and operating margin from 37.1% to 28.6%, consistent with the lower realized price. Cash flow still rose. Sumner said strong production, attractive gas feedstock and the current price environment are driving very strong cash flow generation. The sources we reviewed do not explain the sequential rise in more detail. Net income rose from the second quarter primarily because that quarter carried an asset impairment charge, according to the release, partly offset by a lower realized price in the third quarter. So the net income increase should not be read as underlying improvement.
Capital use is shifting. The company bought back no shares in any of the last five quarters and paid dividends of $14.3M in the third quarter. Sumner said deleveraging is the priority. He added, "We do think that buybacks represent the most attractive return when we can say we are buying back at conservative mid cycle type of valuations or below." Management's stated leverage target is 2.0x to 2.5x adjusted debt to adjusted EBITDA. For a stock that just rose sharply, that comment suggests buybacks may be more likely on pullbacks than at current levels.
Cash-flow multiples look low; P/E is mid-pack. On a trailing-12-month basis, MEOH trades at EV/EBITDA (enterprise value to EBITDA) of 4.93 and price-to-free-cash-flow of 4.61, which we view as low. Its price-to-earnings ratio is 15.41, price-to-sales is 1.17, net margin is 7.6% and the dividend yield is 1.0%. Peers are mixed: Green Plains (GPRE) has a P/E of 7.88 and net margin of 6.7%. LSB Industries (LXU) has a P/E of 18.29 and net margin of 7.0%. Westlake Chemical Partners (WLKP) has a P/E of 13.04 and net margin of 4.7%. Tronox (TROX) has a P/E of -1.04 because it is losing money, with a net margin of -18.0%. MEOH's P/E is above GPRE's and WLKP's, so the "low" read rests on cash-flow measures. Trailing numbers include the weak early quarters, so they understate how strong the last two have been, and they could look very different if prices fall.
Analysts sit close to the price. Consensus price targets average $73.60, with a median of $74.00, a high of $80.00 and a low of $65.00. The stock is already within that range, below the average and above the low. Of 19 ratings, 11 are Buy, 7 are Hold and 1 is Sell, for a consensus of "Buy." The most recent rating action in the last 30 days was UBS maintaining Buy on Oct. 5, 2026. FMP's discounted cash flow model, which is a model estimate and not a forecast from us, gives $105.26 per share. Such models are sensitive to the price assumptions behind them.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for MEOH is 71.9, rated Strong. The pillars, measured relative to its sector, are: momentum 91 (strong), valuation 82 (strong), quality 63 (middle), growth 45 (weak) and safety 42 (weak). In plain terms, the market has been rewarding the stock and its valuation pillar scores well against its sector. Growth and safety are the soft spots, which fits a cyclical commodity producer with sizable debt. Financial strength scores are mixed: Piotroski 8 on a 0-9 scale (strong), Altman Z 2.27 (a bankruptcy-risk gauge where higher is safer; this reading is middling).
Risks and what could go wrong
- The price spike rests on a supply shock. Sumner said only a small share of normal Gulf supply is getting out and that October saw the most ship attacks. If supply returns, he said, "we could see supply come on, pricing lag, demand pick up," and he warned of volatility. In our assessment, prices could also reverse.
- Demand has been lost. Sumner said demand has absorbed the shortfall, but a large amount of annualized demand has gone, including coastal methanol-to-olefins (MTO) plant shutdowns in China. He said that coastal MTO segment "is there to start up" if supply is released, but it would need a lower methanol price to be competitive. For other sectors, he said "there may be a little bit of stickiness" and "we could see volatility." He also cited downstream pressure in Asia Pacific and possible demand pressure from China's winter coal restrictions.
- Analysts expect lower earnings later. Consensus EPS is 0.68 for the period ending 2028-03-30 and 1.18 for the period ending 2028-06-30, far below this quarter's $3.69. Only 5 analysts contribute to those estimates, so they are thin.
- Some plants are constrained. Chile's output is seasonally constrained: single-plant operation through most of the quarter reflected the seasonal drop in Argentine gas during the Southern Hemisphere winter, and two-plant operations restarted late in the quarter. Sumner said year-round gas may take a few years, and indicated 2027 guidance for Chile will likely be about 1.4 million tonnes. In Trinidad, the release said the Titan plant ceased operations and was indefinitely idled in the third quarter. Egypt's gas grid is being watched, and New Zealand is slated for idling in 2027.
- Growth is limited. Management said organic growth economics are weak because construction costs are high. Debt is still sizable, with a debt-to-equity ratio of 1.11.
What to watch next
- Methanol price levels: whether realized prices land in the guided range for October and November and hold through December.
- Fourth-quarter results: management pointed to February, while FMP lists 2027-03-04. Analysts' EPS estimate is 2.97 and revenue estimate is $1.33B. Sumner said 2027 guidance, including Chile production, will come with the fourth-quarter report.
- Buyback activity: whether the company uses its repurchase program, or keeps paying down debt first.
- Gulf shipping and supply news, which management repeatedly tied to significant uncertainty and volatility.
- 2027 capital spending, which management said will be higher than usual but not significantly higher.
Frequently asked questions
Q: Why did Methanex stock go up on October 30, 2026?
Methanex stock rose 14.04% on the day after the company reported third-quarter results that beat analyst estimates, described record cash flow generation, and guided to higher fourth-quarter adjusted EBITDA if current pricing holds. According to the company's release and call, strong methanol prices linked to the Middle East supply disruption and strong North American production supported the results. The sources we reviewed do not establish what drove the share move.
Q: Did Methanex beat earnings estimates in the third quarter of 2026?
Yes. For the quarter ended Sept. 30, 2026, adjusted EPS was $3.69 against an analyst estimate of $2.84, and revenue was $1.36B against an estimate of $1.29B, per our earnings data. The company reported on Oct. 29, 2026.
Q: What is a key risk to Methanex's strong results?
Management stressed significant uncertainty and volatility but did not rank the risks. In our own assessment, a main risk is a reversal in methanol pricing as Middle East supply returns, along with the chance that demand lost during the high-price period is slow to return outside the coastal MTO segment. Analysts' estimates for quarters in 2028 are well below this quarter's EPS, which suggests they expect conditions to normalize.
This is educational content, not investment advice. Past performance does not guarantee future results.