UPDATE: Dahlman Rose Downgrades Walter Energy to Hold on Production and Sales Forecast Cut
Dahlman Rose reduced its rating on Walter Energy (NYSE: WLT) from Buy to Hold as the company is the most heavily exposed name in met coal.
Dahlman Rose noted, "We are shaving 500 thousand tons from premium international metallurgical coal production and sales to 2.3 from 2.8 million tons, due to the higher cost structure of operations in Canada, and we are assuming a $5 discount to benchmark per ton on Walter's metallurgical coal sales. We expect 2012 full-year EBITDA of $612 million and 2013 EBITDA of $609 million, versus $720 and $1008 million previously. … We downgrade to Hold based on the weak short-term outlook, but expect the company to recover strongly in the event of a recovery."
Walter Energy closed at $32.70 on Friday.
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