Methanex (MEOH) Added to Jefferies Franchise Picks

Jefferies reiterated a Buy rating and $86 price target on Methanex (NASDAQ: MEOH) and added the stock to the Jefferies Franchise Picks list and removing Huntsman (NYSE: HUN).

Analyst Laurence Alexander notes, "MEOH is down 11% from recent highs as methanol prices have weakened, but the 4-6 quarter investment case is driven as much by capacity additions (60% over 3 years, perhaps doubling over 7) at the low-end of the cost curve. We continue to like HUN, but find MEOH a more interesting risk/reward: if prices do not recover in Q4, 2014 EPS would be ~$6, and we see the shares attractive at 10x ($60) and hard to sustain below 8x ($48) even in a market correction; to the upside, we see a path to $95 (7.1x 2015E EBITDA, less than Dow [DOW, Hold] currently) if the MLP option appears viable (which would imply a track to ~$110 over a couple of years). Moreover, we believe most of the dip in methanol pricing that we forecasted is now discounted in Methanex shares."

For an analyst ratings summary and ratings history on Methanex click here. For more ratings news on Methanex click here.

Shares of Methanex closed at $65.48 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Freedom Broker Upgrades Power Solutions (PSIX) to Buy
• BTIG Downgrades Sionna Therapeutics (SION) to Neutral, 'we were wrong on our PreciSION CF call'
• Vertex (VRTX) PT Raised to $562 at Wolfe Research