Can Westmoreland Coal Outperform Its Peers in 2Q16?



Series overview

Westmoreland Coal (WLB) is expected to announce its 2Q16 results on July 22, 2016, before the Market opens. In this series, we’ll look at analysts’ expectations for Westmoreland Coal’s 2Q16 earnings and factors that led analysts to arrive at their expectations. We’ll also look at the company’s 2016 guidance and the key indicators that investors should watch in a company’s upcoming earning results.

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Westmoreland Coal’s stock performance

So far, Westmoreland Coal’s stock outperformed its peers in 2016. The recent rally in commodity prices helped the stock recover from its February lows. Since coal competes with natural gas in power generation, an increase in natural gas prices can increase the demand for coal. In turn, that can benefit coal mining companies such as Westmoreland Coal.

Westmoreland Coal stock gained nearly 65% from the beginning of 2016 to July 1, 2016. The VanEck Vectors Coal ETF (KOL) tracks the overall performance of major coal mining companies around the world. It rose nearly 53% during the same period.

Peer performance

Stock prices of major coal mining companies such as Arch Coal (ACIIQ), Cloud Peak Energy (CLD), and Alliance Resource Partners (ARLP) followed a similar trend as Westmoreland Coal after 1Q16. However, Peabody Energy (BTUUQ) was an exception. On April 13, 2016, Peabody filed for Chapter 11 bankruptcy protection. After the announcement, Peabody stock fell by nearly 26% as of July 1, 2016.

Next, let’s see how analysts are rating Westmoreland Coal.


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