MEOH
Methanex Corporation
$55.86
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 45.9% below fair value
You pay
$55.86
Bear
$80.05
Fair
$103.33
Bull
$124.05
Bear
$80.05
+43.3%
4% stage 1 growth, 11% discount
Fair
$103.33
+85.0%
6% stage 1 growth, 11% discount
Bull
$124.05
+122.1%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
36%
Implied Market Multiple
10.1x
Market is pricing in (growth)
-0.4%
vs 6.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $69.20 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $103.33 per share.
Warnings
Wall Street's average price target is $69.20 (from 19 analysts). Our estimate is 66% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions