From GS, July 18th through Commsec;
WHC (Buy, A$2.6/sh TP, 22% TSR) We retain our Buy rating due to:
- Coal stocks - recovering earnings and remain undervalued: We also upgrade our EPS estimates, NAVs and TPs for the coal stocks under coverage and remain Buy rated on CRN, WHC (coal prices upgraded with WHC's recent June Q production report) and NHC. The outlook is positive for both thermal and met coal benchmark prices on ex-China demand strength and supply issues. All three coal names are trading at a discount to NAV, and earnings and FCF growth are very compelling in CY21/FY22 (c. 20% FCF yields) on our new coal price forecasts.
- Valuation: The stock is trading at c. 0.7x NAV (A$2.78/sh). WHC is currently pricing in long run thermal coal price of US$63/t at 70c AUDUSD, versus our long run price assumption of US$72/t for NEWC 6000kcal (FOB) and spot at c. US$145/t.
- Compelling FCF: The stock is trading on a FCF yield of 34% for FY22 on our base case and c. 73% at spot.
- Rapid de-gearing: we expect net debt to more than halve to just c. A$0.3bn by end of Dec, and we also expect management to announce more conservative balance sheet targets in August (current target is through the cycle leverage of 0.5-1.5x) and focus on de-gearing, reinstating a dividend in Feb 2022, and developing growth projects with our preference for brownfields and/or value accretive bolt-ons over greenfields.
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Last
$7.69 |
Change
0.060(0.79%) |
Mkt cap ! $6.429B |
Open | High | Low | Value | Volume |
$7.69 | $7.71 | $7.64 | $11.90M | 1.550M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
54 | 24169 | $7.68 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$7.69 | 19089 | 35 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
38 | 19582 | 7.680 |
32 | 34997 | 7.670 |
23 | 34651 | 7.660 |
13 | 37500 | 7.650 |
12 | 27238 | 7.640 |
Price($) | Vol. | No. |
---|---|---|
7.690 | 18742 | 44 |
7.700 | 49042 | 32 |
7.710 | 36953 | 17 |
7.720 | 21194 | 10 |
7.730 | 97218 | 13 |
Last trade - 14.48pm 28/06/2024 (20 minute delay) ? |
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