Shares of Arch Coal sunk to a 52-week low Wednesday of $9.70. The stock's 52-week high of $35.06 was set on May 2.
Arch Coal shares currently trade at an estimated price-to-earnings ratio for next year of 11.54X; the average for coal companies is 22.32X. For comparison, Peabody Energy (BTU) has a lower forward P/E of 6.96X.Analyst comment: "We reinstate U.S. coal producer Arch Coal at Underperform, as our caution over pricing and volumes for its predominantly thermal coal mix outweighs a positive view on its expansion into met coal," Bank of America Merrill Lynch analysts wrote in a report Wednesday. "We forecast lean cash flow to support pay down of high debt, partly due to elevated capex spending plans for met coal projects. Shares trade at multi-year lows and seem to price in little-to-no thermal recovery, and we believe the stock should continue to underperform its peers." Fifteen of the 31 analysts who cover Arch Coal rate it at hold. Eleven analysts give the stock a buy rating and five rate the stock at sell. TheStreet Ratings gives Arch Coal a C grade and hold rating. The stock has fallen 32.05% year to date.
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