Patriot Coal Earns An Upgrade, But Coal Stocks Continue To Struggle (PCX, BTU, ACI, ANR, CNX, YZC)
Shares of Patriot Coal (PCX), one of the coal names that has been rumored to be a potential takeover target in recent months, are modestly higher today after FBR Capital upgraded the stock to “outperform” from “market perform” while raising its price target on the name to $31 from $30, implying substantial upside from where the shares currently trade.
Even with the positive sentiment toward Patriot, the Coal Stocks Index is still down 0.3% on the day. The Index has slipped 6% in the past three months. FBR’s new price target on Patriot represents almost 50% upside from where the shares reside today and the research firm said Patriot is poised to be a winner due to increased asset sales due to pending coal mergers in the eastern part of the U.S.
FBR also noted that Patriot has the potential to make small or medium-sized international acquisitions and that the company has shown an interest in expanding its reserve base and boosting its production of metallurgical coal, the coal grade that is in high demand by Asian steel producers.
Other coal stocks on the move today include Peabody Energy (BTU), the largest U.S. coal producer, Arch Coal (ACI) and Alpha Natural Resources (ANR), all of which are down 2%. Consol Energy (CNX) is down 3% while Yanzhou Coal Mining (YZC), China’s fourth-largest coal company, is lower by 1%.
Investors can track the Coal Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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