UPDATE: BMO Capital Markets Upgrades Arch Coal to Market Perform, Raises PT
In a report published Monday, BMO Capital Markets Upgraded Arch Coal Inc. (NYSE: ACI) from Underperform to Market Perform and raised its price target $7.00 to $8.00.
BMO Capital markets noted, "[We] are upgrading ACI to Market Perform from Underperform and increasing the target price to US$8 assuming mid-cycle multiples. The primary reason for the upgrade is improving met coal fundamentals. Spot pricing for benchmark met coal has rebounded 14% since August due to a combination of global met coal production cuts and better Chinese demand. Central Appalachian thermal coal fundamentals remain very challenging, but higher margins in met coal may more than make up for continued weakness in domestic thermal. BMO Research continues to prefer coal equities without exposure to high-cost Central Appalachian production, such as Peabody (BTUNYSE; US$26.17, Outperform) and Teck Resources (TCK.B-TSX, C$32.81, Outperform)."
Arch Coal closed at $7.36 on Friday.
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