UPDATE: Nomura Downgrades Alpha Natural Resources to Neutral on Risks

Nomura reduced its rating on Alpha Natural Resources

from buy to Neutral and lowered its price target from $11 to $8. Nomura commented, "We are downgrading Alpha to Neutral (from Buy) owing to more significant earnings and FCF risks than previously modeled. Despite restructuring benefits and curtailment of higher cost, loss-making capacity, we still see ANR generating significant losses over the next few years. We now forecast ANR to generate only $439mm of EBITDA in 2013 and $601mm in 2014, down from previous forecasts of $559 mm and $618 mm, respectively. While ANR should benefit from lower SGA, DDA, and capex, margins and cash flow still look set to weaken." Alpha Natural Resources closed at $8.55 on Thursday.