Zacks.com releases the latest Analyst Interview. Today’s interview is with senior analyst Matthew Thurmond, who discusses Arch Coal (NYSE: ACI), Peabody Energy (NYSE: BTU), Consol (NYSE: CNX), Penn Virginia (NYSE: PVR) and Natural Resource Partners (NYSE: NRP).
A synopsis of today’s Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.
How has your coal coverage been performing lately?
Only one of my companies, Arch Coal (NYSE: ACI) has reported third quarter earnings. The results were lower than expected, but management predicted a rally in coal priced going into 2008. They cited a recent increase in electric demand and a drop in utility coal inventories. We lowered our full-year 2007 EPS estimate to $1.10 from about $1.15 previously due to the lower than expected third quarter results.
Do you have a favorite Buy recommendation in the coal group?
No. Not at this point. All three of the miners I cover are “Hold” rated: Peabody Energy (NYSE: BTU), Arch and Consol (NYSE: CNX). I see continued headwinds going forward and think the stocks are fairly priced.
Aside from miners, I cover two MLP’s in the coal sector. These are yield vehicles that are set up as partnerships and generate most of their income through royalty fees charged to miners. Currently, I have a “Hold” on Penn Virginia (NYSE: PVR) and a “Sell” on Natural Resource Partners (NYSE: NRP).
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