Wells Fargo Upgrades Alliance Holdings (AHGP) to Outperform; Distribution Growth Has Become More Visible

Wells Fargo upgraded Alliance Holdings (NASDAQ: AHGP) from Market Perform to Outperform, price target range increased from $50-53 to $54-$57.

Wells analyst says, "We raise our valuation range based on an increase to our out-year distribution growth estimates given our slightly lower distribution coverage assumptions at AHGP and previously assumed growth at ARLP. Overall, we remain positive toward the Alliance Resource story given the continued strong outlook for coal market fundamentals, recent increase in coal tons contracted for ARLP through 2016 at higher prices and plans for ARLP to develop the Gibson South mine. However, risks still remain, including general industry operating risks, low natural gas prices, retirement of coal utility plants and potentially more-stringent government regulations (environmental and permitting issues), which could be negative long-term factors, in our view."

For more ratings news on Alliance Holdings click here and for the rating history of Alliance Holdings click here.

Shares of Alliance Holdings closed at $47.50 yesterday.

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