Whitehaven Coal’s March-quarter trading update fell a touch shy of Credit Suisse forecasts as covid, tight labour markets and wet weather took their toll.
On the upside, product quality improved and the company was net cash $161m as at April 19 after dividends and buybacks, compared with net debt of $400m at the end of December.
Management reiterates guidance pending no material covid or weather events, and reassures that no new capital expenditure will occur this year, and that market dynamics remain supportive of prices into 2023.
Credit Suisse says capital management is still an upside catalyst and spies a highly cash-generative year.
Target price rises to $5.60 from $4.70. Outperform rating retained.
Sector: Energy.
Target price is $5.60.Current Price is $4.80. Difference: $0.80 – (brackets indicate current price is over target). If WHC meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
