UPDATE: Benchmark Assumes Ramaco Resources Inc. (METC) at Buy
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Benchmark analyst Nathan Martin assumes coverage on Ramaco Resources Inc. (NASDAQ: METC) with a Buy rating and a price target of $6.00.
The analyst comments "We are transitioning coverage of Ramaco Resources (METC) with a Buy rating and $6 price target. Our target assumes the shares are valued at 4.5x 2022E EV/EBITDA. On our 2022 estimates, METC is currently valued at 3.7x versus its peers at an average 4.1x consensus estimates. Last week, METC’s board approved spending to finish construction of the Company’s low-vol Berwind mine as well as break ground on a new mid-vol mine, Big Creek. For a total investment of ~$18M, these two mines would increase production capacity by roughly 50% and improve the Company’s mix. Notably, cash costs/ton for Berwind are expected to be in the low-to-mid $70s compared to management’s earlier $80+ projection, and cash costs/ton for Big Creek are estimated to be in the upper $50s. METC expects to pay for the mines with a combination of working capital, equipment financing, and free cash flow. We believe this low-cost growth potential combined with limited debt and low legacy liabilities make METC worth a look."
Shares of Ramaco Resources Inc. closed at $5.00 yesterday.
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