Goldman coal ratings include Buy for Consol, Sell for Arch Coal

Goldman Sachs picks up coverage of the coal sector (KOL) with a Neutral rating, as it continues to face challenges including coal plant retirements, high net debt levels and commodity prices below historical averages, but some reasons for optimism, including the bottoming of met coal prices (

Among individual stocks, the firm upgrades Consol Energy (CNX) to Buy from Neutral, lifts Alpha Natural (ANR) and Walter Energy (WLT) to Neutral from Sell, downgrades Cloud Peak (CLD) to Neutral from Buy, and cuts Arch Coal (ACI) to Sell from Neutral.

In its upgrade of CNX, Goldman cites improving cash flow from the coal segment, strong production growth from the E&P segment, potential for asset sales and restructuring, and a strong financial profile with industry-leading EBITDA growth and solid leverage metrics; CNX +1% premarket.

In tagging ACI with a Sell rating, the firm cites one of the sector's highest leverage ratios, valuations near historical peak levels, a thermal outlook less bullish than consensus, and below-average earnings growth even if met coal prices recover above forecast; ACI -3.5% premarket.

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Comments (4)
  • tibialexpert
    , contributor
    Comments (45) | Send Message
    GS is about to come out of their short position...Which as I understand is pretty big
    27 Sep 2013, 09:11 AM Reply Like
  • wil3714
    , contributor
    Comments (2370) | Send Message
    atta boy GS bout time you got on board
    27 Sep 2013, 09:41 AM Reply Like
  • slash32is4
    , contributor
    Comments (270) | Send Message
    first MS now GS upgrading WLT is sentiment for coal stocks starting to turn?
    27 Sep 2013, 11:43 AM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2877) | Send Message
    Whew! I'm down 50% on the year. I thought someone wrote that King Coal was dead? Between BlackBerry and WLT, I'm starting to feel like no one loves me.
    27 Sep 2013, 03:33 PM Reply Like
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