Whitehaven Coal has received NSW Independent Planning Commission approval to expand the Vickery project to 10mtpa. A range of secondary approvals must now be obtained to progress the expansion and UBS expects these by the end of 2020.
However, the timing of a final investment decision is likely to depend on the state of the coal markets. The broker now anticipates the company will engage in more meaningful offtake and sell-down discussions. Buy rating and $2.60 target maintained.
Target price is $2.60.Current Price is $1.42. Difference: $1.18 – (brackets indicate current price is over target). If WHC meets the UBS target it will return approximately 45% (excluding dividends, fees and charges – negative figures indicate an expected loss).