Goldman Sachs upgraded Walter Energy (NYSE: WLT) from Sell to Neutral with a price target of $15.00 (from $10.00).
Analyst Neil Mehta cited improving risk/reward at met bottoms. He also notes short interest levels appear elevated, presenting risk of a reversal leading to a stock price increase.
"As of September 1, short interest as a percent of the float for WLT was at 43% (per FactSet), the highest among any small cap stock under Goldman Sachs Equity Research coverage," Mehta notes. "Going into 2013, short interest was at only 12%, with dramatic increases over the last 4 months as met coal prices pulled back."