Whitehaven Coal finished FY20 strongly and reached saleable production guidance.
However, the standard June quarter build up in inventory will lead to softer comparable earnings, Credit Suisse suspects.
The broker does not have the company entering positive earnings territory until FY23 and assumes no dividends until then as well.
The LNG glut continues to influence thermal coal prices while soft electricity demand has added to the pressure.
Outperform rating and $2.25 target maintained.
Target price is $2.25.Current Price is $1.52. Difference: $0.73 – (brackets indicate current price is over target). If WHC meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges – negative figures indicate an expected loss).