Dahlman Rose Downgrades Alpha Natural Resources (ANR) to Hold; Lack of Upside From Weak Met Market

September 4, 2012 7:47 AM EDT
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Dahlman Rose downgraded Alpha Natural Resources (NYSE: ANR) from Buy to Hold.

Analyst, Daniel Scott, said, "We expect Alpha to take off about a million tons of met production, to 23 million tons from 24 million tons, in 2013 from its highest cost operations. We model an average met coal price per ton for fourth quarter 2012 of $107 versus $133 prior and for 2013 of $125 versus $138 prior on uncommitted tonnage and lower Appalachian cost of sales slightly from $77.5 to $77. The drop in expected met pricing lowers our EBITDA expectations for 2012 to $706 from $765 million and for 2013 to $697 from $1048 million prior. Alpha amended its credit facilities in late June and began the year with substantial cash, so we do not foresee liquidity issues through 2013. Our downgrade to Hold is based on a lack of upside value through 2013 on account of the weakened met market."

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 $5.94 yesterday.

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