Queensland’s government has a new royalties scheme effective from July1 2022. This applies a 20% royalty for coal prices that are over $175/t, 30% for prices over $225/t and 40% for over $300/t.
Credit Suisse understands the royalties calculation will be based on Coronado Global Resources’ weighted average realised prices at Curragh. As a result the broker trims its target to $ 3.00 from $3.40.
The share price has been declining following the announcement and the broker believes the associated valuation impact has largely been incorporated while yields remain attractive. Outperform maintained.
Target price is $3.00.Current Price is $1.63. Difference: $1.37 – (brackets indicate current price is over target). If CRN meets the Credit Suisse target it will return approximately 46% (excluding dividends, fees and charges – negative figures indicate an expected loss).