The company has downgraded production guidance, which has disappointed Morgans. Nevertheless, despite concerns about Narrabri’s complex issues, the broker is comfortable that these appear to be in hand.
A weaker coal price remains the headwind, but the broker suggests momentum buyers will readily return as Chinese buying behaviour eventually normalises.
The broker also believes market interest in the capital management upside will gather strength into the second half. Add rating maintained. Target is reduced to $5.15 from $5.40.
Target price is $5.15.Current Price is $4.08. Difference: $1.07 – (brackets indicate current price is over target). If WHC meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).