Methanex (MEOH) shares soared 5.6% in the last trading session to close at $43.45. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.2% loss over the past four weeks.
MEOH’s shares rallied following an upgrade by analysts at Raymond James from “Market Perform” to “Outperform”. The analysts cited Methanex's potential for benefiting from a recent upswing in methanol prices after an 18-month decline. Additionally, they expect that the company would resume paying dividends next year. As a result of this positive outlook, Raymond James also increased its price target for Methanex shares from $50 to $60 per share.
This methanol supplier is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of -118.8%. Revenues are expected to be $756.36 million, down 25.3% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Methanex, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MEOH going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Methanex belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Olin (OLN), closed the last trading session 0.8% lower at $49.40. Over the past month, OLN has returned -12.1%.
Olin's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.78. Compared to the company's year-ago EPS, this represents a change of -64.2%. Olin currently boasts a Zacks Rank of #4 (Sell).
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