Davenport Upgrades Alpha Natural Resources (ANR) to Buy

September 22, 2008 12:12 PM EDT

Davenport upgrades Alpha Natural Resources (NYSE: ANR) from Neutral to Buy. Price target $80.

Davenport analyst says, "Paradoxically, the upgrade in rating is being made simultaneously with a reduction in our earnings estimates, and is driven by two primary considerations: 1) an assessment that as the market has so significantly discounted the possibility of the previously announced merger with Cleveland-Cliffs being consummated on proposed terms, that any announcement of a terminated transaction should not negatively impact the stock price; and 2) a belief that, like many of its coal producer peers, the approximately 40% decline in share price that we have witnessed in ANR stock since 7/15/08 represents an unwarranted overcorrection relative to our assessment of the intervening change in industry fundamentals, which we believe peaked around the beginning of July."

Alpha Natural Resources, Inc. is an Appalachian coal supplier.

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