Credit Suisse notes Australian metallurgical coal prices have experienced another rally and are now well above estimates. The backdrop: Chinese domestic coal output suppressed under safety and pollution controls, Mongolian exports constrained by the pandemic, Canadian exports affected by wildfires and a tight labour market in the US, all signalling the coal market is unlikely to soften soon.
Under a spot scenario the broker expects Coronado Global could reach net cash of US$140m by the end of the year. With a buoyant price in Australia and the US, the broker is positive about the stock and envisages upside with the share price trending towards the target of $1.60. Outperform maintained.
Target price is $1.60.Current Price is $1.23. Difference: $0.37 – (brackets indicate current price is over target). If CRN meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).