Back in late 2011 Citi stopped covering New Hope Corp, leaving with a Buy recommendation and $6.10 price target. Circumstances since have obviously changed a lot. Today, Citi re-appears with a Neutral rating and $2.55 price target.
The analysts’ conviction is that FY19 marks the top of this cycle, otherwise known as “peak earnings”. Currently market dynamics are “weak”, point out the analysts, and their own view on the outlook for thermal coal is “bearish” (their own description).
The present valuation doesn’t look demanding, but then if the future is for more weakness… today’s multiples will only rise, point out the analysts. Citi’s forecasts imply a sliding path forward, including for dividends.
Sector: Energy.
Target price is $2.55.Current Price is $2.55. Difference: $0.00 – (brackets indicate current price is over target). If NHC meets the Citi target it will return approximately 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).
