Goldman Sachs downgraded Alpha Natural Resources (NYSE: ANR) from Neutral to Sell with a price target of $4.00 (from $6.00).
Analyst Neil Mehta said, "We downgrade Alpha Natural Resources (ANR) from Neutral to Sell, with a 6-month price target of $4, implying a -24% return vs. -1% for our coverage group. We are downgrading to Sell given: (1) a challenging met coal price outlook, driving our EBITDA estimates sharply below consensus; (2) valuations near historical peak levels on an EV/EBITDA basis; (3) competitively disadvantaged assets, including higher-cost met coal assets and lower-quality PRB mines; and (4) high leverage levels and incrementally negative FCF on our new forecasts. We believe estimates need to be recalibrated lower before we can potentially become more constructive on the stock."
This feels like a Clown Grade. Of all the stocks out there that are trading at billions more than their worth like Tesla, Netflix, etc., GS has to reach down and pound a stock that is in their opinion worth a couple hundred million less than the market thinks it is. This just feels like a worthless data point down here. What matters isn't what the stock is worth in these terrible macros but whether the macros are set to turn. The stock will bottom months before the data turns.