Global Hunter Securities Starts Alpha Natural Resources (ANR) at Neutral; Strategic Plan is Growth, But Cutting Back Production

Global Hunter Securities initiates coverage on Alpha Natural Resources (NYSE: ANR) with a Neutral.

Analyst, Wayne Atwell, said, "Alpha has been built over the last seven years through a series of acquisitions. It acquired Foundation Coal Holdings in 2009 and Massey Energy in 2011, and is now the third-largest US coal producer with 2011 coal shipments of 106.3 million tons and a resource base of 4.7 billion tons. The Massey acquisition is expected to provide $220 million to $260 million in annual synergies by 2013. Massey was a major metallurgical coal producer with 2.4 billion of coal reserves. Following the this acquisition, Alpha Natural Resources is now the largest US producer and exporter of metallurgical coal. We look for Alpha to enhance its business model over the next several years by growing its metallurgical coal capacity by approximately 4.0 million tons by 2015, permanently closing up to 10% of its high-cost thermal mine capacity within 12 months and stepping up its coal exports to Asia. We believe the company will restructure its thermal coal capacity over the next 6-12 months."

"Its EV/EBITDA multiple has averaged 7.1x over the last three years, which would generate a $21 share price when applied to our 2013 estimated EBITDA. However, in view of the fact that we project it will have a net loss over the next 1-2 years, we are not assigning a price target at this time."

For an analyst ratings summary and ratings history on Alpha Natural Resources click here. For more ratings news on Alpha Natural Resources click here.

Shares of Alpha Natural Resources closed at $10.79 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• BMO Capital Resumes Global Net Lease (GNL), Upgrades to Outperform
• Citi Starts Federal Signal (FSS) at Buy
• BTIG Starts Freenome Inc. (FRNM) at Buy