Macquarie sees positive signs for coal stocks, Nomura remains skeptical

Coal stocks have been creeping higher during the last few months, but opinions differ on whether the sector is turning around.

Macquarie analysts see positive signs for coal stocks, with utilities and rails believing coal is still available and being delivered while coal producers note higher demand and order books which are close to full; the firm calls Consol Energy (CNX) its top pick, and give Outperform ratings to Cloud Peak Energy (CLD) - an opportunity to buy a well positioned PRB pure play heading into the summer - and Peabody Energy (BTU) - where cash flows from its Powder River Basin operations can support depressed met coal operations.

But Nomura's Curt Woodworth thinks the market has been too optimistic about a potential Powder River price spike, and sees further downside risks to BTU and Arch Coal (ACI).

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Comments (3)
  • BHT
    , contributor
    Comments (36) | Send Message
    I'll believe a turn around when the stock prices go back up.
    23 May 2014, 05:14 PM Reply Like
  • aow
    , contributor
    Comments (151) | Send Message
    If these companies can't turn a profit with nat gas prices where they are today, how are they going to do so when nat gas falls back to earth? Between the mercury standards and the recent SCOTUS decision, coal has an uphill battle.
    24 May 2014, 01:04 PM Reply Like
  • Seriouspatt
    , contributor
    Comments (864) | Send Message
    And why on earth should gas prices decrease again? Do you see a second fracking hype coming? Because I don't. Gas will not be as cheap as it is for long. Coal with have its comeback, the question is when.
    25 May 2014, 10:19 AM Reply Like
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