New Hope downgraded FY22 saleable coal production guidance by -8% after a soft April due to wet weather and labour constraints at Bengalla. Nonetheless, Credit Suisse retains its Outperform rating and $4.90 target, noting free cash flow generation is outstanding.
Any volume downside risks should be countered by pricing upside, in the analyst’s opinion. It’s felt both Credit Suisse and consensus may have to upgrade forecasts, which are based on levels well below the current spot price.
Sector: Energy.
Target price is $4.90.Current Price is $3.78. Difference: $1.12 – (brackets indicate current price is over target). If NHC meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
