Morningstar

Morningstar, Inc.

Equity Bottom-Up

Whitehaven Coal shares have recovered somewhat in the past week but there’s still reasonable value on offer. The shares trade around AUD 3.80, about a 14% discount to our unchanged AUD 4.40 per share fair value estimate for the no-moat-rated firm. The shares have sold off materially since October last year, falling one third from highs of AUD 5.75. Production issues, particularly in the third quarter of fiscal 2019, coupled with the declining thermal coal price are the key reasons the shares are…

Whitehaven aggressively expanded production through the commodities boom, particularly with the flagship Maules Creek mine starting in 2015. The strong recovery in coal prices in 2016 to 2018 helped to generate much-needed cash flow to meaningfully repay debt. Maules Creek adds lower-grade metallurgical coal to Whitehaven's product mix, with the company aiming to increase it to more than 45% of the total output, from around 20% in fiscal 2019. Narrabri is Whitehaven's other major mine and is a…

Iron ore and gold prices are flying but we don’t think either will last. Iron ore is benefiting from unusually strong demand and supply disruptions while gold is rising with negative interest rates. The global miners remain overvalued. The sector trades at an average 10% premium to our fair value estimates, versus a 20% premium three months ago. The iron ore miners--BHP, Rio Tinto, Fortescue and Vale, on average are at a 30% premium, while the rest of our coverage is only at a 4% premium. The…

Steel-making materials stocks, those exposed to iron ore and coking coal, have markedly outperformed our near-term expectations. The key reasons have been continued strong steel demand growth, particularly in China, and more recently, Vale’s tragic tailings dam failure and Cyclone Veronica. Iron ore supply losses this year are material, about 6% of global iron ore supply and some of that will bleed into 2020. Coking coal supply has also been impacted in the near-term through increased safety…

<p>No-moat Australian coal producer Whitehaven Coal delivered 19% growth in net profit to AUD 306 million for first-half 2019. The rise was driven by buoyant prices for both thermal and metallurgical coal. Net of royalties, Whitehaven realised an average 17% increase in coal prices to AUD 142 per tonne. Revenue increased 11% despite an 11% fall in coal sales volumes, net of purchased coal, versus the first half of fiscal 2018. Production was soft in the half, primarily due to disruptions at…</p>

Australia

Whitehaven Coal Limited mines and sells metallurgical and thermal coals to the global steel, power generation, and metallurgical industries.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00