FLX – Citi rates the stock as Hold, High Risk

Growth awaits the patient investor, Citi believes. The broker has initiated coverage with a Hold, High Risk recommendation and a target price of $5.90. Company is seen offering exposure to the thermal, semi-soft and PCI coal market with anticipated significant production and earnings growth over the next three years.

The analysts believe the Molarben project is key for the company. A mining lease is expected to be granted in the next few months. If everything goes to plan the project should improve earnings in FY09 and “transform Felix’s investment fundamentals”. Also, the analysts note AMCI has recently bought 19.2% of Felix. The company’s board and management are holding 41%. Given the appetite for quality coal operations, a bid for the company cannot be dismissed, the analysts comment.

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ILU – Merrill Lynch rates the stock as Buy

The broker has been making further adjustments to its currency forecasts and this has had the consequence of further earnings estimates cuts for Iluka. The analysts are quick on their feet to emphasize there is still value at the current share price but haven’t we heard that one before? Merrill Lynch nevertheless believes investors should look past the exceptionally low earnings of FY07 and focus on a likely much better FY08 instead.

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ENE – Citi rates the stock as Hold, High Risk

Analysts note increased short term risks of more project delays and some negative FY07 earnings drivers have caused the share price to lose 10% in value over the past month or so. A buying opportunity? Never think that what has come down cannot come down a little more!

Citi analysts agree and preach ongoing cautiousness. They state this morning they would like to see the share price to come back further before an upgrade to Buy would seem justified.

Having said this, they also believe prospects for FY08 should look better. But before investors can fully focus on next year, there’s still the risk management will have to scale back FY07 guidance – and we all know what the risks to such an event are…

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