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Coal & Allied has enjoyed a sterling run this year, its share price rising 48.5% to date. UBS said the climb was driven upon the expectation of increased earning and a higher dividend payment.
“Coal & Allied has been hampered by the inability to increase export sales due to the port management system which has capped CNA’s allocation at 25Mtpa,” UBS analysts said.
They also raised concerns on the state of the spot steam coal market, with current spot prices sitting at $US42/t against a contract price of $US53/t for the Japanese financial year.
“This suggests price falls could be larger than forecast,” UBS said.
The brokerage left its price target unchanged at $A44.
Coal & Allied closed yesterday at $49.01.
