Coal mining giant Walter Energy, Inc. (WLT) on Thursday caught some bullish sentiment from analysts at Wunderlich Securities.
The firm said it initiated coverage on WLT with a “Buy” rating and $79 price target, suggesting a massive 60% upside to the stock’s Wednesday closing price of $49.20.
A Wunderlich analyst commented, “Walter Energy, a pure play metallurgical coal company, mines some of the highest quality metallurgical coal globally, with a growth model that should result in lower costs. It has one of the highest operating margins in the US coal industry. The location of its properties provides easy access to the export market.”
Continuing, the firm noted “The following catalysts should add value to WLT shares: 1) the successful completion of its production growth over the next two years; 2) its ability to cut costs as it expands production over the next two years; and 3) its ability to expand its export shipments through the modification of its Mobile River Terminal.”
Walter Energy shares, which have fallen nearly 19% year-to-date, posted modest gains in premarket trading Thursday.
The Bottom Line
Shares of Walter Energy (WLT) have a 1.02% dividend yield, based on last night’s closing stock price of $49.20. The stock has technical support in the $39-$40 price area. If the shares can firm up, we see overhead resistance around the $53-$57 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.