NEW YORK (TheStreet) -- Walter Energy Inc. (WLT) was downgraded by UBS AG (UBS) to "neutral" from "buy" which also lowered the energy company's price target to $8 from $25 in a note published Wednesday.
The report cites a weak coal market and analysts believe that the $250 million in asset sales Walter Energy is banking on will be hard to come by due to the limited market."Based on our muted medium-term outlook for coking coal prices and Walter's high balance sheet leverage, we do not see a compelling reason to accumulate the shares," said the report.
"WLT continues to target $250 million in asset sale proceeds but the process is behind schedule due to weak market conditions," the note continues, "In our view, asset sales are not likely to substantially improve WLT's credit profile.
Walter Energy shares closed at $7.77 on Tuesday. Walter Energy was down 0.9% to $7.70 in premarket trading Wednesday
Separately, TheStreet Ratings team rates WALTER ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate WALTER ENERGY INC (WLT) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and generally high debt management risk."