Jefferies Becomes More Bullish On Coal Industry, Raises Price Target & Estimates On Multiple Companies
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Rating Summary:
16 Buy, 20 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Jefferies is becoming more bullish on the coal industry as it expects that the U.S. will export more than it previously did and that the met price will rise.
The firm is raising its 2011 net coal export expectations by five million tons due to added thermal shipment opportunities and recent east coast and gulf coast port performance. It is raising its estimates to reflect $330 per ton benchmark and a $300 per ton Q3 target and $280 per ton for 2012.
The estimate increases reflect Jefferies belief that investors will continue to allow improved valuations as met scarcity. The firm is also believes that coal equities will continue to find investor support from higher global oil and LNG prices, energy and commodity fund flow, weak dollar sentiment, continued evidence of a still tight global coking and encouraging thermal market, and consolidation economics.
Jefferies comments that it has adjusted its coal supply demand model to reflect a more global improvement in fundamentals allowing for higher net exports.
Due to its new estimates, Jefferies is raising its earnings estimates slightly on Arch Coal Inc. (NYSE: ACI), Alpha Natural Resources, Inc. (NYSE: ANR), CONSOL Energy Inc. (NYSE: CNX), James River Coal Co. (Nasdaq: JRCC), and Massey Energy Co. (NYSE: MEE). The firm is raising its price targets on Peabody Energy Corp. (NYSE: BTU) and International Coal Group, Inc. (NYSE: ICO) from $80 and $11 to $85 and $12.50.
The firm is raising its 2011 net coal export expectations by five million tons due to added thermal shipment opportunities and recent east coast and gulf coast port performance. It is raising its estimates to reflect $330 per ton benchmark and a $300 per ton Q3 target and $280 per ton for 2012.
The estimate increases reflect Jefferies belief that investors will continue to allow improved valuations as met scarcity. The firm is also believes that coal equities will continue to find investor support from higher global oil and LNG prices, energy and commodity fund flow, weak dollar sentiment, continued evidence of a still tight global coking and encouraging thermal market, and consolidation economics.
Jefferies comments that it has adjusted its coal supply demand model to reflect a more global improvement in fundamentals allowing for higher net exports.
Due to its new estimates, Jefferies is raising its earnings estimates slightly on Arch Coal Inc. (NYSE: ACI), Alpha Natural Resources, Inc. (NYSE: ANR), CONSOL Energy Inc. (NYSE: CNX), James River Coal Co. (Nasdaq: JRCC), and Massey Energy Co. (NYSE: MEE). The firm is raising its price targets on Peabody Energy Corp. (NYSE: BTU) and International Coal Group, Inc. (NYSE: ICO) from $80 and $11 to $85 and $12.50.
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