Nomura Securities Maintains a 'Reduce' on Arch Coal Inc (ACI); Cutting Estimates

May 2, 2012 9:09 AM EDT Send to a Friend
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Price: $2.05 +1.49%

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    11 Buy, 13 Hold, 7 Sell

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    Up: 24 | Down: 24 | New: 17
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Nomura Securities maintains a 'Reduce' on Arch Coal Inc (NYSE: ACI), new price target of $8.00.

Analyst, Curt Woodworth, said, "We believe consensus EPS estimates remain too high for ACI. We now forecast a 2012 EPS loss of $0.50 and a 2013 EPS loss of $1.00. PRB production has a very high fixed cost base (~60% of total costs) and thus depends heavily on volume to achieve unit economics. The ~20mt cut to PRB volumes in 2012 creates significant cost inflation, and we now forecast PRB cash costs at ~12.00/ton for 2012 and 2013, up from $10.50/ton in 2011. Our new $8 PT assumes ACI trades at 10.0x 2012Efar EV/EBITDA."

For an analyst ratings summary and ratings history on Arch Coal Inc click here. For more ratings news on Arch Coal Inc click here.

Shares of Arch Coal Inc closed at $9.22 yesterday.


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