UPDATE: Nomura Securities Downgrades Alpha Natural Resources (ANR) to Neutral on Earnings and FCF Risks

October 12, 2012 7:38 AM EDT Send to a Friend
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Price: $2.26 +1.35%

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(Updated - October 12, 2012 7:51 AM EDT)

Nomura Securities downgraded Alpha Natural Resources (NYSE: ANR) from Buy to Neutral with a price target of $8.00 (from $11.00).

"We are downgrading Alpha to Neutral (from Buy) owing to more significant earnings and FCF risks than previously modeled," analyst Curt Woodworth said. "Despite restructuring benefits and curtailment of higher cost, loss-making capacity, we still see ANR generating significant losses over the next few years. We now forecast ANR to generate only $439mm of EBITDA in 2013 and $601mm in 2014, down from previous forecasts of $559 mm and $618 mm, respectively. While ANR should benefit from lower SGA, DDA, and capex, margins and cash flow still look set to weaken. ANR sells about 40% of its met volume domestically, where price levels were near $147/ton in 2012 and we see compression among these higher quality tons in the $20/ton range for 2013"

The firm cut 3Q12E EPS from ($0.47) to ($0.48); F12E EPS from ($1.60) to ($1.70); F13E EPS from ($2.45) to ($2.00).

For an analyst ratings summary and ratings history on Alpha Natural Resources click here. For more ratings news on Alpha Natural Resources click here.

Shares of Alpha Natural Resources closed at $8.55 yesterday.


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