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Walter Energy -8.2% as Wells Fargo downgrades, cuts earnings estimate

  • Walter Energy (WLT -8.2%) is downgraded to Market Perform from Outperform with a $10-$13 target price range from $18-$20 at Wells Fargo.
  • With China potentially slowing again due to tightening credit, the firm believes coal prices will remain challenging in 2014; the analysts also cite WLT's high debt and weak earnings as reasons for the target cut.
  • The firm also cuts its 2014 EPS estimate to a $2.56 loss from a $1.03 loss.
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Comments (16)
  • 6151621
    , contributor
    Comments (1180) | Send Message
     
    Analysts sticking their neck out playing follow-the-leader (or em -the-stock-price). Where was this target a couple weeks ago when WLT was at $16?! Love the value added service here!
    24 Jan 2014, 01:45 PM Reply Like
  • jzut
    , contributor
    Comments (91) | Send Message
     
    At 19 no downgrade. But anal ist downgrade at 11.50. ????????
    24 Jan 2014, 01:50 PM Reply Like
  • slash32is4
    , contributor
    Comments (161) | Send Message
     
    that means bottom soon...
    24 Jan 2014, 01:51 PM Reply Like
  • benitus
    , contributor
    Comments (2129) | Send Message
     
    Wells Fargo analysts are the worst. This is not the first time that they've caused turmoil with their irresponsible downgrading (men of little faith!!). Onw wonders how can they be qualified even to make such calls. Unfortunately, the irresponsible downgrade coincided with a rough market pull-back today, which makes me suspect that they're working for their short-selling clients. Now is the time for faithful to pick up more shares and hurt these analysts and their clients. Anyway, such downgrades had happened to WLT before and each time, the strong support that it enjoys from its share-holders had enabled to recover from the depths.
    24 Jan 2014, 02:14 PM Reply Like
  • Sirvasq
    , contributor
    Comments (335) | Send Message
     
    Bought the 2015 LEAPs. When values emerge, be ready.
    24 Jan 2014, 02:52 PM Reply Like
  • wil3714
    , contributor
    Comments (2058) | Send Message
     
    China this China that same oh story
    24 Jan 2014, 03:24 PM Reply Like
  • papayamon
    , contributor
    Comments (1190) | Send Message
     
    i bought 600 shares here. no great shakes but could easily be up $1200 in a month. i have learned not to take large positions with coal. better to invest where the fundamentals are more favorable in natural gas. i love to gamble here, and i've done well with wlt. so at $12, why not?
    24 Jan 2014, 04:09 PM Reply Like
  • benitus
    , contributor
    Comments (2129) | Send Message
     
    Good for you, papayamon.....I've been picking up quite a bit myself after it went below $13 because it's definitely worth more than $13, given the tremendous support it has, despite its debts (who doesn't have debts?; even the richest country in the world has debts; having debts is part of doing business) and the gloomy outlook for the coal industry (nothing new; it's been around for the past few years). Coal is still the mainstay of several states and the cheapest source of energy for power stations at this time. It should bounce back above $13 in time, so it's a good time to load up on WLT.
    26 Jan 2014, 08:27 AM Reply Like
  • jhample
    , contributor
    Comments (3) | Send Message
     
    Agreed, benitus....although WLT is driven more by the market for producing iron and steel, (as the product WLT produces is actually Metallurgical Coal that is used in those industries). Coal as energy for power stations doesn't really drive the demand for the product of WLT, which is driven more by the demand for steel. (Still, I agree with your overall sentiment, and am actually even a bit more optimistic than that.)
    26 Jan 2014, 09:01 AM Reply Like
  • wil3714
    , contributor
    Comments (2058) | Send Message
     
    You guys are brave, you havent factored in China and its PMI + macro issues with emerging markets. This is where major demand for coal is going to come from and it looks like its taken a standstill as coal prices arent going to increasing right now.
    26 Jan 2014, 12:00 PM Reply Like
  • benitus
    , contributor
    Comments (2129) | Send Message
     
    wil3714......it's only rumor-mongers and short-sellers who're using China as scare tactics to drive the market down for their own benefit. As someone who used to know China better than the Chinese themselves way back when (I've officially visited every province, which very few Chinese do themselves, not even the central govt), don't believe whatever that foreigners write about the Chinese economy because they're wrong, as the Chinese authorities are excellent at manipulating the news for their own advantage. I always tell people never to teach the Chinese how to do things right because they'll do it better than you.

     

    China's thirst for steel is unsatiable and they also export steel at the same time as they're importing steel and they're the biggest consumer of scrap metal because they're refraining from using their own resources if they can import them. They've got the largest coal and iron-ore reserves in the world and yet, they're importing iron-ore and coal as well.

     

    So, all this crap about China's economic performance affecting the world economy is only used by those outside of China to generate news and make something out of nothing. Anyone who thinks that they know everything about the Chinese economy is absolutely wrong because there are at least three levels of economic activity operating in China simultaneously, viz. one at the official level, another directly by individual provinces or cities, then yet another on the black market (which thrives the most). Those who are guided by what is reported on China are being led down a blind alley by the blind themselves and the Chinese are laughing themselves all the way to the bank.

     

    Coal prices aren't increasing now is due to a multitude of factors, among which are that increasing production of natural gas and crude are diluting demand for coal at the moment, but they will bounce back as they've always done. Whatever it is, I believe that the value of WLT is above $13 at this time, so it's a good time to load up on WLT.
    26 Jan 2014, 09:17 PM Reply Like
  • wil3714
    , contributor
    Comments (2058) | Send Message
     
    No doubt China is the growth engine of the world growing even @ 7%+ in 2013. I'm sure any country would love to grow like that consistently. But looking at the hard data, PMI was hit hard, shadow banking, lending rates, overcapacity, etc. issues that still loom and arent going away soon. The growth in steel prod is going to come from emerging markets and they are going through the motions. Only the US, EU, and China are doing well but that looks priced in.

     

    I like to do my own research than follow someone but China has incredible thirst for infrastructure buildout but thats over. They arent spending $1T like they did in 2009. Looking at the spot price of met coal it isnt close to 2010.

     

    Dont know why you mentioned heated coal vs met coal.
    27 Jan 2014, 12:44 AM Reply Like
  • jhample
    , contributor
    Comments (3) | Send Message
     
    Great value at these levels. Haven't lost faith. By 3rd quarter this will be a woulda, coulda, shoulda stock. Get on board soon!
    26 Jan 2014, 03:51 AM Reply Like
  • rd peters
    , contributor
    Comments (3) | Send Message
     
    No such thing as bad publicity for an analyst.----As long as they are talking about me----
    26 Jan 2014, 09:03 AM Reply Like
  • fanebrp
    , contributor
    Comments (278) | Send Message
     
    Since when could Wells Fargo ever analyze a company correctly?? WF has a short sale in the works.
    27 Jan 2014, 01:07 AM Reply Like
  • wil3714
    , contributor
    Comments (2058) | Send Message
     
    are you speculating or have actual proof?
    27 Jan 2014, 01:40 AM Reply Like
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