UBSWhitehaven Coal - MetamorphosisWe update on WHC including...

UBS

Whitehaven Coal - Metamorphosis

We update on WHC including completion of the Blackwater and Daunia acquisition and inclusion into our base case. We have also lifted CY25E to long term met coal prices 11%-13% (but trimmed CY24E by 8%). The BHP-Mitsubishi Alliance (BMA) transaction is accretive on our estimates and strategically pivots WHC to primarily a met coal producer (~70% of revenues) diversified across both NSW and QLD. We are increasingly bullish the met coal outlook given supply constraints (in particular in QLD) and a resilient demand outlook (with India growth the key long term driver). We come off a period of Restriction and incorporate these changes into our forecasts, resulting in EPS >doubling from FY25/26E, lift our Price Target to A$8.70/sh and upgrade to Buy rated.