Morgan Stanley expects Australia's Whitehaven to continue robust performance despite choppy market

Whitehaven Coal

17/03/2025 22:32

** Morgan Stanley sees coal miner Whitehaven Coal WHC.AX continuing its strong performance with a projected FY25 free cash flow yield of 13.4%

** WHC's operational efficiency has improved, as it's on track to meet its FY25 guidance, and maintains costs at A$140-A$155 per metric ton — MS

** Brokerage says co's strong cash generation allows for a decrease in debt post-acquisition and a resumption of share buybacks, with predicted FY25 gearing of 6%

** Despite a drop in coal prices, recovery is expected due to supply control policies and possible inventory reduction — MS

** Says co's valuation appears cheap with FY25/26 EV/EBITDA estimates below the global average for its sector

** Maintains "overweight" rating at PT of A$8.05

** 9 of 13 analysts rate the stock "buy" or higher and 1 "hold"; their mean PT is A$8.37 — LSEG data

** Stock down 8.4% as of the last close

 (Reporting by Kumar Tanishk in Bengaluru)

 ((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk))