Monday June 25, 12:00 pm Eastern Time
RESEARCH ALERT-UPDATE 1-Lehman raises Arch Coal rating
biz.yahoo.com
(UPDATE: adds comparative figures paragraph 3, recasts lead)
NEW YORK, June 25 (Reuters) - Lehman Bros. on Monday said it raised its 2002 and 2003 earnings forecasts for Arch Coal (NYSE:ACI - news) and raised its investment rating on the company's shares to strong buy from
buy. Lehman analyst Peter Ward in a research note said weak sentiment toward the energy sector has driven the price of shares of the St. Louis-based company to a level that represents ``excellent value.''
Ward said that given Arch Coal's recent success in negotiating higher priced long-term contracts, he raised Lehman's 2002 earnings forecast to $2.20 per share from $2.00 and its 2003 forecast to $2.65 from $2.35. ``In our opinion, Arch Coal represents an attractive takeover target for global mining conglomerates,'' he added. Shares of Arch Coal closed at $22.75 on the New York Stock Exchange on Friday, near the middle of their 52-week range from $7 to $38.25.
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Monday June 25, 11:04 am Eastern Time
Arch Coal Shares Rise After Upgrade
biz.yahoo.com
NEW YORK (Reuters) - Shares of Arch Coal Inc. (NYSE:ACI - news) rose sharply in early trade on Monday after Lehman Brothers raised its rating on the stock to ``strong buy'' from ``buy.''
Arch shares were up 7.82 percent, or $1.78 to, $24.53 at midmorning on the New York Stock Exchange. Lehman analyst Peter Ward raised his price target on the stock to $42, citing good coal volumes and increased prices. ``Given the recent success in negotiating higher-priced long-term contracts, we are raising our 2002 and 2003 earnings (per share) estimates to $2.20 and $2.65, respectively,'' Ward wrote in a research report.
Coal companies generally sell their coal under long-term contracts whose expirations are staggered over several years. As coal prices have risen and contracts have expired, the outlook for earnings has improved. Seven analysts polled by Thomson Financial/First Call estimated Arch's earnings at $1.47 to $2.39 for 2002, with a consensus estimate of $2.39. ``In our opinion, Arch Coal represents an attractive takeover target for global mining conglomerates,'' he Ward said. |
