Analysts’ Views on Arch Coal Ahead of Its 3Q17 Results

Analysts’ ratings

As of October 27, 2017, of the nine analysts covering Arch Coal (ARCH) stock, eight (89%) recommended “buy” or “strong buy,” and one (11%) recommended “hold.” There were no “sell” or “strong sell” ratings.

Analysts’ Views on Arch Coal Ahead of Its 3Q17 Results

Arch Coal’s price target

Arch Coal’s 12-month target price was $94.88 as of October 27, 2017. The target price indicates an upside potential of 31.2% based on its price of $72.30 on October 27, 2017. Macquarie initiated coverage on ARCH on September 7, 2017, giving the stock a “neutral” rating with an $84 price target. Since the release of its 2Q17 results on July 27, 2017, just one analyst made a target price adjustment for ARCH. On August 31, 2017, JPMorgan Chase upgraded Arch Coal stock from “neutral” to “overweight,” raising the price target from $80 to $90

Consensus estimates

Year-over-year and quarter-over-quarter, analysts expect Arch Coal to post marginally higher 3Q17 revenue figures. They anticipate Arch Coal’s EPS (earning per share) to be approximately $1.88, compared with -$1.43 in 3Q16.

Arch Coal received a “buy” rating from analysts. The recommendation was primarily due to the company’s manageable debt after exiting Chapter 11 bankruptcy protection and an expected increase in cash flow from its operations. Coal (KOL) mining peer Peabody Energy (BTU) has also recently emerged from bankruptcy. Other coal companies that have filed for bankruptcy are Alpha Natural Resources (ANRZQ) and Walter Energy (WLTGQ). In the next part, we’ll examine analysts’ expectations for Arch Coal.