FBR Capital Maintains an 'Outperform' on Arch Coal (ACI); Expanding Growth Options Through Accretive Acquisition
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Price: $19.91 --0%
Rating Summary:
16 Buy, 20 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 15 | Down: 17 | New: 4
Rating Summary:
16 Buy, 20 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 15 | Down: 17 | New: 4
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FBR Capital maintains an 'Outperform' on Arch Coal Inc (NYSE: ACI), PT lowered from $50 to $46.
FBR analyst says, "Our thesis for Arch Coal: (1) Powder River Basin (PRB) coal prices should rise to a more normal level, bucking the laggard label; (2) met value is underappreciated, although it may not be fully recognized in 2011; (3) integration with ICO will increase met exposure; (4) Arch is a low-cost producer; (5) the company benefits from high safety standards; and (6) the company has large underutilized productive capacity that is only partially included as producing in our forecast. Once the ICO acquisition is consummated, the combined company is also expected to generate about $1.35 billion in free cash for 2012–2013, which should allow it to pay down debt."
"We are updating our estimates assuming mid 2011 close and providing 2012 and 2013 EPS/EBITDA pro forma estimates of $3.89/$1,1,771M and $4.49/$1,907M, about 4% accretive to our current stand-alone estimates of $3.76/$1,291M and $4.26/$1,374M, respectively."
For more ratings news on Arch Coal Inc click here and for the rating history of Arch Coal Inc click here.
Shares of Arch Coal Inc closed at $33.53 yesterday.
FBR analyst says, "Our thesis for Arch Coal: (1) Powder River Basin (PRB) coal prices should rise to a more normal level, bucking the laggard label; (2) met value is underappreciated, although it may not be fully recognized in 2011; (3) integration with ICO will increase met exposure; (4) Arch is a low-cost producer; (5) the company benefits from high safety standards; and (6) the company has large underutilized productive capacity that is only partially included as producing in our forecast. Once the ICO acquisition is consummated, the combined company is also expected to generate about $1.35 billion in free cash for 2012–2013, which should allow it to pay down debt."
"We are updating our estimates assuming mid 2011 close and providing 2012 and 2013 EPS/EBITDA pro forma estimates of $3.89/$1,1,771M and $4.49/$1,907M, about 4% accretive to our current stand-alone estimates of $3.76/$1,291M and $4.26/$1,374M, respectively."
For more ratings news on Arch Coal Inc click here and for the rating history of Arch Coal Inc click here.
Shares of Arch Coal Inc closed at $33.53 yesterday.
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