WHC - Macquarie rates the stock as Underperform
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March quarter operations were broadly in line with expectations, although sales were slightly lower than Macquarie expected. The broker observes the company has been the beneficiary of a strong rally in coal prices as well as its own operating success.
Nevertheless, it appears the company has to offer larger discounts to be able to increase semi-soft sales in the market. Hence, although Macquarie acknowledges the company will re-gain some revenue from emptying inventories in the fourth quarter, significantly higher prices are not expected.
Rating is downgraded to Underperform from Neutral. Target is reduced to $2.70 from $2.80.
Target price is $2.70.Current Price is $2.98. Difference: ($0.28) - (brackets indicate current price is over target). If WHC meets the Macquarie target it will return approximately -10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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