Credit Suisse’s commodities team expects coal prices will remain elevated in the mid-term as geopolitical conflict and trade flow constraints continue to impact on supply. With Europe and other coal consumers looking to move away from Russian supply, a scarcity for high grade thermal coal should support healthy premiums on Australian exports.
With the broker lifting thermal price forecasts 41-109% through to 2026, its earnings forecasts for New Hope increase 10%, 129% and 196% for the same period.
The broker prefers Whitehaven Coal ((WHC)) over New Hope. The Outperform rating is retained and the target price increases to $4.90 from $3.50.
Sector: Energy.
Target price is $4.90.Current Price is $3.53. Difference: $1.37 – (brackets indicate current price is over target). If NHC meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges – negative figures indicate an expected loss).
