KeyBanc Starts SunCoke Energy (SXC) at Buy; Poised for Alpha/Growth in Mature Market

KeyBanc initiates coverage on SunCoke Energy (NYSE: SXC) with a Buy. PT $15.00.

KeyBanc analyst says, "SXC is the only publicly traded "pure-play" metallurgical coke producer in the United States, offering investors a unique and defensive growth avenue in a mature domestic steel sector. We believe industry leading technology and improving operational execution positions the Company well to benefit from the structural coke supply deficit in North America and the unfolding replacement cycle of aging legacy coke plants."

"SXC's defensiveness and growth potential seem under-appreciated at current levels...Our 2013 EBITDA estimate of $301 million (vs. the Street's $283 million) and EPS estimate of $1.70 (vs. the Street's $1.42)...We feel the recent successful conclusion of a major capital spending cycle (Middletown plant construction) and the upcoming share distribution by Sunoco (NYSE: SUN)(currently 81% shareholder) provide SXC with solid EBITDA growth opportunities over the next several years, as well as the ability to pay a dividend over the next 12 months."

For an analyst ratings summary and ratings history on SunCoke Energy click here. For more ratings news on SunCoke Energy click here.

Shares of SunCoke Energy closed at $11.02 yesterday.

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