Why Wall Street Rates Westmoreland Coal a ‘Buy’



Analysts’ ratings

All three Wall Street analysts covering Westmoreland Coal Company (WLB) gave the company a “buy” rating. There were no “sell” or “hold” ratings for the company as of October 27.

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Price target

Westmoreland Coal’s consensus 12-month target price as of October 27 was $6.50. The target price indicates an approximately 216% upside potential, considering the stock price of $2.05 when the market closed on October 27. Since the release of WLB’s 2Q17 earnings, BMO Capital downgraded WLB stock from “outperform” to “market perform” and dropped the target price to $5.0 from $18.0.

Consensus estimates

Analysts expect Westmoreland Coal Company (WLB) to post a higher operating profit in 3Q17 compared to 2Q17. Also, analysts expect Westmoreland Coal’s adjusted LPS (loss per share) to be around $0.33 for 3Q17 compared to an adjusted LPS of $2.69 in 2Q17 and nearly $0.46 in 3Q16.

Among key coal (KOL) producing companies, analysts recommend buy Westmoreland Coal Company mainly due to its unique business model, secured cash flows from long-term coal supply contracts, diversified asset base, and low production costs.

The strategic location of its mines also helps Westmoreland Coal Company minimize coal delivery costs compared to its competitors like Peabody Energy (BTU), Natural Resource Partners (NRP), and Arch Coal (ARCH).

Next, let’s analyze expectations and recommendations from analysts for Westmoreland Coal Company for 3Q17.


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