Upgrades and Energy Prices Light Up Coal Stocks

• By the tickerspy.com Staff
• On 12:29 pm EDT, Tuesday September 22, 2009

Energy prices are heading north for the winter, and an analyst fueled the coal rally with upgrades on Tuesday.

Coal miners are shooting higher across the board today after Citigroup analysts offered some optimism for the sector. Citi expects a coal demand rebound in the U.S., and said hard coking coal prices should settle around $200 per ton in 2010 and 2011, ahead of the prior $140 per ton forecast. The analyst upgraded Alpha Natural Resources (NYSE: ANR - News) and Peabody Energy (NYSE: BTU - News) to Buy from Hold today, boosting price targets throughout the sector.

As a whole, the Coal Stocks Index is up by 3.8% on the news. It is now outperforming the S&P 500 by 9% over the last month.

Patriot Coal (NYSE: PCX - News) received a price target boost from Citi after being initiated with a Sell rating in January. Patriot was downgraded to Neutral from Buy at UBS last Thursday. Over the last three months, the stock has outperformed all of its coal miner peers, up by 130%.

Other stocks with new, higher price targets from Citi include Arch Coal (NYSE: ACI - News), Consol Energy (NYSE: CNX - News), and Massey Energy (NYSE: MEE - News).

National Coal (NASDAQ: NCOC - News), International Coal Group (NYSE: ICO - News), and James River Coal Company (NADSAQ: JRCC) are among top one-month performers. All three have advanced by more than 20% for the period.

As of this writing, the Coal Stocks Index is one of top-30 performing tickerspy Indexes over the last month, up by 13.2%. Despite the sector's recent run, it remains one of the cheapest by P/E ratio.

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