While New Hope’s half year result was largely pre-announced the company did surprise Credit Suisse with the announcement of a 30 cents per share interim dividend.
Given the announced intention to issue special dividends more regularly, the broker noted company commentary suggested dividend returns may be prioritised over acquisition activity in the short-term, and adds a 15% special earnings payout to its model.
Credit Suisse also notes continuing tightness in the coal industry may see New Hope coal command a premium price above US$200 per tonne for a number of years, and increases its pricing forecast to US$230 per tonne in the second half.
The Outperform rating is retained and the target price increases to $3.50 from $3.00.
Sector: Energy.
Target price is $3.50.Current Price is $3.20. Difference: $0.30 – (brackets indicate current price is over target). If NHC meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
