Morgans sees dividend upside for New Hope and thinks shares can re-rate as the market appreciates the scope of current cash flows, as thermal coal prices continue to rally. The target price jumps to $4.69 from $3.67 and the Add rating is unchanged.
With no obvious M&A targets, the broker believes the company may maintain a modest cash balance. The FY23 outlook for seaborne thermal coal pricing is also thought to be better than implied by the market.
Target price is $4.69.Current Price is $3.53. Difference: $1.16 – (brackets indicate current price is over target). If NHC meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).