New Hope Corporation delivered a solid second half. Credit Suisse notes 2.8m tonnes in coal sales and in line earnings of $552m suggest a slight price discount, likely due to a timing lag given the rapid growth of spot pricing year-to-date.
Looking ahead, the broker notes New Hope Corporation could accumulate around 90% free cash flow yield between FY22 and FY24, while likely net cash growth could support further dividends, construction and merger and acquisition opportunity.
The Outperform rating is retained and the target price increases to $3.00 from $2.70.
Sector: Energy.
Target price is $2.70.Current Price is $2.68. Difference: $0.02 – (brackets indicate current price is over target). If NHC meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
