Coal producer Walter Energy, Inc. (WLT) on Monday caught some bullish commentary from analysts at Wells Fargo.
The firm initiated coverage on WLT with an “Outperform” rating and $77 to 84 price target range. That target implies up to a 37% upside to the stock’s Friday closing price of $61.50.
A Wells Fargo analyst commented, “With coal supply coming offline and demand improving as Chinese steel production is bottoming, we expect fundamentals for the metallurgical coal industry to stabilize and view the risk/reward on Walter shares as attractive. We also expect Walter’s cost structure to improve as mining challenges abate and see value in the company as a mergers and acquisitions (M&A) play as has been speculated in the media.”
Walter Energy shares fell 90 cents, or -1.5%, in premarket trading Monday.
The Bottom Line
Shares of Walter Energy (WLT) have a .81% dividend yield, based on Friday’s closing stock price of $61.50. The stock has technical support in the $55-$57 price area. If the shares can firm up, we see overhead resistance around the $64-$68 price levels.
Walter Energy, Inc. (WLT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.
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