Whitehaven Coal shares slide amid analyst downgrades
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The news: Whitehaven Coal shares were among the biggest losers on the ASX 200 in afternoon trading, despite reporting higher full-year production on Friday, as Citi and Bell Potter downgraded their recommendation on the miner.
The numbers: Whitehaven Coal shares had slipped 4.9% to $6.61 at 2:57pm AEST despite on Friday reporting a 60% jump in full-year coal production. Rival Yancoal was also down 2.9% to $6.31.
Bell Potter analysts lowered their 12-month target price from $7.10 to $6.90 while Citi analysts lifted theirs from $7 to $7.10. Both lowered their recommendations from 'buy' to 'hold' and 'neutral' respectively.
The context: Bell Potter analyst James Williamson said the downgrade was due to “recent strong share price performance”, according to a research note.
He anticipates a positive long term metallurgical coal, which Whitehaven is positioned to capitalise on.
Williamson said that Whitehaven’s operational outlook is strengthening, “underpinned by a focus on cost out and productivity enhancements that position the company to withstand sustained periods of coal price weaknesses”.
Meanwhile, the Citi analysts also cut their recommendation on the stock “given the shares are now near” their target price. They described the June quarter production and cost figures as “impressive”.
The sources: Citi research, Bell Potter research
