Credit Suisse suspects the subdued reaction to the larger-than-expected distribution in the first half likely reflected broader sentiment and softening coal prices. The broker notes there is a commitment to release 11% of the stock from voluntary escrow six months early.
While selling down the stake remains an option versus a commitment, the broker suggests this signals the major owners are keen to alleviate the liquidity headwinds that have capped the share price.
Credit Suisse maintains an Outperform rating but suspects the coal price and macro sentiment are overshadowing company specific factors. Target is reduced to $4.60 from $4.80.
Target price is $4.60.Current Price is $3.12. Difference: $1.48 – (brackets indicate current price is over target). If CRN meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges – negative figures indicate an expected loss).