Arch Coal Inc Gets a Buy Rating from B.Riley FBR

By Jason Carr

B.Riley FBR analyst Lucas Pipes maintained a Buy rating on Arch Coal Inc (NYSE: ARCH) today and set a price target of $95. The company’s shares closed yesterday at $78.85.

Pipes commented:

“Last week, we hosted a NDR with Arch Coal’s SVP and CFO John Drexler and Director External Affairs Logan Bonacorsi. The conversation continued to be dominated by the company’s capital return strategy, execution, strategic vision, and market outlook for met and thermal coal. Overall, we believe that management impressed investors with its clear commitment to returning capital while maintaining a strong balance sheet. Management believes that its balance sheet and low operating cost position enable Arch to take greater pricing risk in the seaborne met coal market and sell at least 80% of its 2018 volumes internationally. Management was constructive on the price outlook for met coal on the supply disruptions this year and lack of new growth projects. We are maintaining our Buy rating with a $95 target price.”

According to TipRanks.com, Pipes is a 3-star analyst with an average return of 2.9% and a 50.3% success rate. Pipes covers the Basic Materials sector, focusing on stocks such as Peabody Energy Corporation Comm, Newmont Mining Corporation, and Stillwater Mining Company.

Arch Coal Inc has an analyst consensus of Strong Buy, with a price target consensus of $89.60.

Based on Arch Coal Inc’s latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $614 million and quarterly net profit of $68.35 million. In comparison, last year the company earned revenue of $550 million and had a GAAP net loss of $51.42 million.

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Arch Coal, Inc. engages in the production and distribution of thermal coal. It operates through the following segments: Powder River Basin; Metallurgical; Other Thermal; and Corporate, Other and Eliminations. The Powder River Basin segment consists of primary thermal operations in Wyoming.