The company is structurally challenged given its high leverage ratios and low returns relative to other companies in their coverage, its leverage to analysts' cautious met coal price outlook, and its competitively disadvantaged assets, analysts said.
Therefore, analysts rated the shares "neutral" as these concerns appear reflected in shares with the stock having fallen by 85% over the last year.
Key risks include higher met coal prices, additional asset sales and better-than-expected cash costs, they noted.
Alpha Natural Resources and its operating subsidiaries are engaged in the business of extracting, processing and marketing coal from deep and surface mines, located in the Central and Northern Appalachian regions of the U.S.
Separately, TheStreet Ratings team rates ALPHA NATURAL RESOURCES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALPHA NATURAL RESOURCES INC (ANR) a SELL. This is driven by multiple 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 poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows: