UBS Lowers Price Target on James River Coal (JRCC); Increasing Cost of Debt

June 27, 2012 11:57 AM EDT
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Price: $0.25 --0%

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UBS maintains a 'Neutral' on James River Coal (NASDAQ: JRCC) price target of $2.50 (from $4.50).

Analyst, Shneur Z. Gershuni, said that after Standard & Poor’s cut JRCC’s corporate rating to CCC+ and lowered the company’s $275 million senior notes and convertible notes, he expected an increase in the cost of debt.

Gershuni said, "As a result of the increased cost of capital, we are lowering our NAV-derived PT to $2.50 from $4.50. We would guide investors toward names with stronger balance sheets, no looming debt maturities, and positive cash flow generation. For met exposure we would point to Walter Energy (NYSE: WLT). For thermal exposure we would point to CONSOL Energy (NYSE: CNX)."

For an analyst ratings summary and ratings history on James River Coal click here. For more ratings news on James River Coal click here.

Shares of James River Coal closed at $2.49 yesterday.

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