Buy Cloud Peak Energy (CLD) on Pullback, FBR Capital Says

FBR Capital analyst Mitesh Thakkar reiterated an Outperform rating and $26 price target on Cloud Peak Energy (NYSE: CLD) saying the recent pullback creates an attractive entry point.

Thakkar comments, "Since April 8, Cloud Peak Energy shares have fallen nearly 18% compared with a more than 3% increase in the S&P 500 and PRB 8800 one-year-forward prices up 1%, largely following the rest of the coal space (more met levered) downward
over the same period. Despite this, our thesis on the PRB remains intact, with 2015 forward PRB prices now at our target, coal demand remaining strong, and inventories declining to an eight-year low driven by tight supply and solid demand. With 53% of Cloud Peak's 2015 volumes still unpriced, we continue to like CLD for its exposure to recovering PRB markets and FCF generation potential post-2015. While we think some investors have been concerned about CLD's valuation versus its historical range, we believe the valuation is inexpensive on DCF and yield-based approaches. That said, we think the recent pullback provides an attractive entry point."

For an analyst ratings summary and ratings history on Cloud Peak Energy click here. For more ratings news on Cloud Peak Energy click here.

Shares of Cloud Peak Energy closed at $18.11 yesterday.

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