trending Market Intelligence /marketintelligence/en/news-insights/trending/tyMcG2-e3CQY6tpSib8J7A2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Analyst expects Arch Coal earnings miss but urges focus on outlook

Essential Energy Insights - September, 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August

Bull market leaves US utilities behind in August

Utilities, midstream reckon with energy transformation on the horizon

Analyst expects Arch Coal earnings miss but urges focus on outlook

FBR & Co. analyst Lucas Pipes predicts that Arch Coal Inc. will miss earnings expectations for the fourth quarter of 2016 but urges investors to focus on the outlook for his favorite stock in the mining sector.

In a Feb. 1 note, Pipes claimed Arch's valuation is "unreasonably cheap" and opined that the fourth-quarter results expected Feb. 8 will be an opportunity for the company to "set the record straight." He said exposure to top-tier metallurgical coal and thermal coal assets, multiple catalysts and a compelling valuation all make the case for investing in Arch.

"We estimate that ARCH is trading at 4.1x 2017 EV/EBITDA and 4.8x 2018 EBITDA," Pipes wrote. "This compares to the peer group at 5.0x and 6.5x, respectively. In our opinion, this discount does not make any sense in light of the company's high-quality mine portfolio, exposure to higher met coal and thermal coal prices, and clean balance sheet."

Still, the note stated, FBR is now estimating EBITDA of $78 million in the recent quarter versus consensus estimates of $93 million, reflecting a more conservative estimate of open metallurgical coal tonnage. Pipes wrote that U.S. Mine Safety and Health Administration data shows production from Arch's metallurgical coal mines was toward the lower end of the company's guidance.

The note said FBR expects that Arch's earnings will start to reflect a sharp increase in metallurgical coal prices in the first quarter of 2017. FBR maintained an outperform rating on Arch.

"We believe that the company offers attractive exposure to a met coal market that has been experiencing sharp price improvements," Pipes said. "We view the company as a low-cost producer with high-quality operating assets in both met and thermal coal."