Factors that drove coal stocks
Uncertainty surrounding the recovery of coal prices and the enactment of environmental regulations such as the Clean Power Plan were the major factors that impacted coal stocks in 1Q16. As coal competes with natural gas in electricity generation, low natural gas prices had an indirect negative impact on coal stocks in 1Q16.
The major coal mining stocks reached new lows in 4Q15 due to the slump in the commodities market. However, the recent rally in natural gas prices helped coal mining stocks to recover from their 4Q15 lows.
In this series, we’ll perform a comparative analysis of the major coal mining companies’ 1Q16 earnings. Also, we will take a close look at their respective management’s guidance and analyst expectations for 2016. We’ll conclude the series with a brief mention of current valuations of incumbent coal miners and an outlook for the coal industry.
In the next part of this series, we’ll compare the coal (UGAZ) shipments’ growth rate of the major coal mining companies in 1Q16.