The stock price of Alpha Natural Resources, Inc. (OTCMKTS:ANRZ) declined more than 7% on Friday and closed at $0.0693. Around 4.73 million shares were traded compared to monthly average share volume of 9.65 million. The decline can be attributed to a number of sell-side downgrades in target price and ratings.
Alpha Natural comes in the list of the largest producer firms of metallurgical coal, and low-sulfur thermal coal used in the electrical power and steel in the U.S. This year has been a complete disaster for the company’s stock as it eroded more than 80% of its market value in 2015.
The oversupply of coal with tough environmental regulations has adversely affected the prices of thermal and metallurgical. Earlier this month, the New York Exchange initiated proceedings for delisting Alpha Natural common stock, as the stock price was trading at an “abnormally low” level. It was then listed on the over-the-counter market.
The analysts’ view
The analysts at Sterne Agee CRT are negative on the stock and have downgraded stock to ‘neutral’ from ‘buy’ as the company performance continues to suffer. The analysts’ maintained a twelve-month target of $3 on ANRZ stock.
As per the analysts, Michael Dudas and Satyadeep Jain, they reduced rating on company to ‘Neutral’ from ‘Buy; and subsequently suspended their equity research coverage on Alpha Natural. The FY2015 and FY2016 loss per share projections at the time of closing of report is $2.45 and $2.00, respectively. Jeremy Sussman of Clarkson Capital Markets LLC maintained a “sell” rating on the stock, and lowered the price target to five cents from fifty cents. The company is also in negotiations with third entities related to a possible bankruptcy filing.
Alpha Natural Resources, Inc. (OTCMKTS:ANRZ) had crashed from the sphere of $0.25 levels to much below $0.20 with a large gap just a few days back, which has remained unfilled till now. The stock lost 7.6% in the last trading session but that would not affect the medium term structure much as the stock has been in a sideways range for the last few sessions. The low of the day at $0.0643 was a new 52 week low too but that was a very natural result of the increasing bearish momentum, as evident from the chart attached.