Nomura Securities on Metals & Mining: EPS Preview and Coal to Gas Switching Update
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Rating Summary:
2 Buy, 11 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 4 | New: 11
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Nomura Securities on Metals & Mining: EPS Preview and Coal to Gas Switching Update
Analyst, Curt Woodworth, said, "We now forecast coal to gas switching of 70mt in the U.S. in 2012 relative to 2011. Coal to gas switching continues as we estimate ~34Mt of coal is displaced during Q1, as gas prices continue to fall on increased production. We believe coal to gas switching will continue to increase through the summer of 2012, with the biggest impact on CAPP and PRB demand. PRB prices have the best chance of recovering to normalized levels by 2013, given their heightened sensitivity to changes in gas prices, relative to Appalachian coals."
Alpha Natural Resources (NYSE: ANR) (Buy, $20): will report 2012 first quarter earnings on 5/3. Reiterate Buy. 1Q12E EPS estimate of -$0.01 (Consensus: -$0.04). We recently upgraded the stock on 4/11. We believe ANR will be a structural survivor in the CAPP market longer term owing to a strong base of high-margin coking coal properties and low-cost NAPP thermal assets.
Arch Coal (NYSE: ACI) (Reduce, $12): will report 2012 first quarter earnings on 5/1. 1Q12E EPS estimate of $0.13 (Consensus: $0.20).
Consol Energy (NYSE: CNX) (Buy, $45): will report 2012 first quarter earnings on 4/26. 1Q12E EPS estimate of $0.54 (Consensus: $0.60).
Patriot Coal (NYSE: PCX) (Reduce, $6): will report 2012 first quarter earnings on 4/26 (tentative). 1Q12E EPS estimate is a loss of $0.37 (Consensus: -$0.33).
Peabody Energy (NYSE: BTU) (Neutral, $38): will report 2012 first quarter earnings on 4/19. 1Q12E EPS estimate of $0.58 (Consensus: $0.57).
Walter Energy (NYSE: WLT) (Neutral, $70). will report 2012 first quarter earnings on 5/2 (tentative). Our EPS was revised from $1.59 to $0.75 in 1QE (Consensus $0.97) and from $6.10 to $4.50 in 2012E
Analyst, Curt Woodworth, said, "We now forecast coal to gas switching of 70mt in the U.S. in 2012 relative to 2011. Coal to gas switching continues as we estimate ~34Mt of coal is displaced during Q1, as gas prices continue to fall on increased production. We believe coal to gas switching will continue to increase through the summer of 2012, with the biggest impact on CAPP and PRB demand. PRB prices have the best chance of recovering to normalized levels by 2013, given their heightened sensitivity to changes in gas prices, relative to Appalachian coals."
Alpha Natural Resources (NYSE: ANR) (Buy, $20): will report 2012 first quarter earnings on 5/3. Reiterate Buy. 1Q12E EPS estimate of -$0.01 (Consensus: -$0.04). We recently upgraded the stock on 4/11. We believe ANR will be a structural survivor in the CAPP market longer term owing to a strong base of high-margin coking coal properties and low-cost NAPP thermal assets.
Arch Coal (NYSE: ACI) (Reduce, $12): will report 2012 first quarter earnings on 5/1. 1Q12E EPS estimate of $0.13 (Consensus: $0.20).
Consol Energy (NYSE: CNX) (Buy, $45): will report 2012 first quarter earnings on 4/26. 1Q12E EPS estimate of $0.54 (Consensus: $0.60).
Patriot Coal (NYSE: PCX) (Reduce, $6): will report 2012 first quarter earnings on 4/26 (tentative). 1Q12E EPS estimate is a loss of $0.37 (Consensus: -$0.33).
Peabody Energy (NYSE: BTU) (Neutral, $38): will report 2012 first quarter earnings on 4/19. 1Q12E EPS estimate of $0.58 (Consensus: $0.57).
Walter Energy (NYSE: WLT) (Neutral, $70). will report 2012 first quarter earnings on 5/2 (tentative). Our EPS was revised from $1.59 to $0.75 in 1QE (Consensus $0.97) and from $6.10 to $4.50 in 2012E
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