Analyst Upgrades Alpha Natural Rating On Purchase
DENVER (AP) ¿ Shares of Alpha Natural Resources Inc. rose Friday after an analyst upgraded his rating on the coal producer because of its plan to purchase Foundation Coal Holdings Inc. for $1.4 billion in stock.
In a research note, Goldman Sachs analyst Brian Singer also raised a target price for both Arch Natural and Foundation Coal and maintained Foundation's "Buy" rating.
The acquisition, if completed, would give Alpha Natural more diversified assets, improve growth opportunities and be accretive to cash-on-cash returns of both companies, Singer said.
He rated Alpha Natural a "CL-Buy," up from "Neutral," and raised his six-month multiples-based target price to $38 a share from $32 a share.Singer revised his earnings per share estimates for Alpha to 57 cents from 60 cents in the second quarter of 2009; 76 cents from 75 cents in the third quarter and 72 cents from 70 cents in the fourth quarter. For the full year, he estimated earnings per share of $2.71 which is unchanged. Foundation's six-month multiples-based target price was raised to $41 from $33 to reflect additional earnings based on its recent settlement of a contract dispute, Singer said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV