Alpha Natural Resources -2.4% AH as Goldman cuts to Sell

Alpha Natural Resources (ANR) -2.4% AH after Goldman Sachs downgrades shares to Sell from Neutral with a $4 price target, down from $6.

Goldman cites a challenging met coal price outlook which drives its EBITDA estimates sharply below consensus; valuations near historical peak levels on an EV/EBITDA basis; competitively disadvantaged assets, including higher-cost met coal assets and lower-quality PRB mines; and high leverage levels and an incrementally negative free cash flow forecast.

The firm says estimates need to be recalibrated lower before it could become more constructive on the stock.

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Comments (10)
  • wigit5
    , contributor
    Comments (4365) | Send Message
    Probably so they can load up at $4 to sell at $6 later lol... coal can't win it seems...
    6 Mar 2014, 09:07 PM Reply Like
    , contributor
    Comment (1) | Send Message
    The stupid thing here is that GS does not talk about the positives. The recent JV deal with Rice added $1.50 a share in value and climbing because 2/3 of that is stock in the Rice IPO. Additionally, ANR has over $4.00 of cash and reduced their interest expense on all their debt. With a book value of over $17.00 a share and the other assets which they hold, it's not a matter of if but when the stock will explode to the upside. GS is wrong like so many of their other calls. Look at JC Pennney!
    7 Mar 2014, 01:08 AM Reply Like
  • xtddd
    , contributor
    Comments (332) | Send Message
    yes , i always believe that if i believe in GS, i can't make money!
    8 Mar 2014, 07:18 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
    dont forget ANR still owns approx 10k acres (per their last 10Q/K) in marcellus which could yield even more money then the Rice Energy JV did not only because of it's size (Rice only got 7500 acres) but because the acreage has been validated by the success of Rice.
    8 Mar 2014, 09:27 AM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
    Another GS calling all Muppets to sell ANR (so we can load up at your expense).
    7 Mar 2014, 01:11 AM Reply Like
  • Coalfan
    , contributor
    Comments (121) | Send Message
    What odd timing. When natural gas inventories might reach 800BCF
    Surely there will be coal switching. ANR may not be worth 20 bucks a share, but $4???? Come on
    7 Mar 2014, 05:00 AM Reply Like
  • LetsGoPSU
    , contributor
    Comments (166) | Send Message
    But GS is talking about met coal. I agree with you on coal switching, which is bullish for thermal coal, for which ACI is a better play. Long ACI
    7 Mar 2014, 11:10 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
    The problem with $ANR's steam coal is a lot of it is Appalachia, they have 2 mines in PA, and 2 large PRB mines but no presence in the colorado basin... the good news is they have been undertaking massive cuts in both unprofitable mines and personnel. Now that they have the UBB (Massey mine explosion) behind them, and this latest EPA fine now done, assuming there is no more bad news other than sector related it should start to find some strength.
    7 Mar 2014, 11:12 AM Reply Like
  • BornIn87
    , contributor
    Comments (111) | Send Message
    Wow. Huge reaction to a downgrade.
    7 Mar 2014, 09:57 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
    Yeah I'm not surprised though the $PCX bankruptcy and the $JRCC concerns are still fresh in everyone's minds... ANR and ACI are the next two obvious targets for BK should the coal market, and this government (US) continue its current trends.
    7 Mar 2014, 10:46 AM Reply Like
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