Macquarie Upgrade

From FNArena today

Macquarierates WHC asUpgrade to Outperform from Neutral(1) -

Whitehaven Coal's share price has decreased -32% over the past 12 months while thermal coal prices have increased 91% over the same period. With spot prices higher than expected, Macquarie notes there is upside to operating income, margins and free cash flow.

The broker sees value in the company not targeting growth and rather harvesting cash from existing operations and increasing returns to shareholders over the remaining life of operations.

Led by thermal coal prices, the broker increases its earnings forecasts by 130% and 290% in a spot price scenario for FY22 and FY23.

Macquarie upgrades to Outperform from Neutral with a $1.70 target.

Target price is$1.70Current Price is$1.25Difference:$0.45
IfWHCmeets the Macquarie target it will return approximately36%(excluding dividends, fees and charges).

Current consensus price target is$1.94, suggesting upside of42.9%(ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Macquarie forecasts a full yearFY21dividend of0.00cents and EPS ofminus 6.10cents. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) isminus 20.49. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is-8.9, implying annual growth ofN/A. Current consensus DPS estimate isN/A, implying a prospective dividend yield ofN/A. Current consensus EPS estimate suggests the PER isN/A.

Forecast for FY22:

Macquarie forecasts a full yearFY22dividend of5.00cents and EPS of19.30cents. At the last closing share price the estimated dividend yield is4.00%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is6.48. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is3.9, implying annual growth ofN/A. Current consensus DPS estimate is1.6, implying a prospective dividend yield of1.2%. Current consensus EPS estimate suggests the PER is34.9.