While multiples remain attractive for coal miners, Macquarie downgrades New Hope to Neutral from Outperform following recent strength in the share price.
Despite there being significant earnings and valuation upside at spot prices, the broker’s base case assumptions for thermal coal are muted. Target is raised to $1.70 from $1.50.
Target price is $1.70.Current Price is $1.83. Difference: ($0.13) – (brackets indicate current price is over target). If NHC meets the Macquarie target it will return approximately -8% (excluding dividends, fees and charges – negative figures indicate an expected loss).