Whitehaven falls as analysts mixed on Q4 results

12:16pm on 22 July 2024

The news: Whitehaven Coal shares lowered in morning trade on the ASX after analysts were mixed on the coal miner following the release of its Q4 results on Friday.

The numbers: Whitehaven shares fell 3.7% to $8.01 by 12:15pm AEST.

Citi analysts downgraded their rating on the stock from 'buy' to 'neutral' and cut their target price from $9.20 to $8.90. They noted that Whitehaven shares were now up around 15% in the last three months and trading at a "modest premium" to their $8.15 net present value.

Macquarie also downgraded Whitehaven to 'neutral' from 'outperform' and lowered its price target by 3% to $8.75. Analysts said the miner's Q4 results and revised FY25 assumptions drove a 4% to 6% downgrade to its earnings per share estimates from FY24 to FY27.

UBS analysts retained their 'buy' rating on Whitehaven, but lowered their price target from $9.65 to $9.40. They reduced their earnings per share estimates by 21% in FY24 and 6% in FY25 due to sales delays and higher costs at Whitehaven's Daunia mine.

Meanwhile, Bell Potter analysts upgraded Whitehaven from 'hold' to 'buy' and hiked their 12-month target price from $8.90 to $9.90. They lowered their earnings per share estimates by 13% for FY24, and lifted them 12% in FY25.

The context: Whitehaven shares slid on Friday after reporting improved June quarter production and sales.

UBS described the company's Q4 result as a "solid finish to FY24", with Whitehaven leveraged to metallurgical coal which the analysts are "positive on medium-long term".

Bell Potter, which also hold as a positive long-term outlook on metallurgical coal, said that Whitehaven's improved near-term production and earnings outlook justified the upgrade.

However, Macquarie analysts said that Whitehaven's 10% share price gain since April leaves the company with "limited upside on valuation", mirroring Citi's assessment.

The sources: Citi research, UBS research, Macquarie research, Bell Potter research