Commodities & Metals

Goldman Sachs Slams Coal in Downgrade

Coal investors are getting coal put in their stockings early in 2014. Alpha Natural Resources Inc. (NYSE: ANR) is having a very rough end to its week as a result. The culprit: Goldman Sachs hit the company with a nasty downgrade that took the wind out of its sails on Friday. The firm’s already cautious Neutral rating was taken down to a dubious Sell rating. Its price target was slashed to $4 from $6 in the call.

Alpha was down almost 10% at one point on Friday morning. Goldman Sachs lowered its metallurgical coal price projection for to $141 per metric ton this year from $150. The firm also sees lower prices in 2015 and 2016 as well. Friday’s call is on the heels of higher output in Australian output, as well as slowing growth of Chinese imports. Another issue is limited supply rationalization in the United States. The current oversupply issue may even increase in the coming years.

Goldman Sachs also maintained a Neutral rating but lowered its target on Walter Energy Inc. (NYSE: WLT) to $10 from $12 in the call. Walter shares were down almost 6% at $10.30 in mid-day trading on Friday.

Arch Coal Inc. (NYSE: ACI), a coal stock that we recently said could double in 2014 under the right circumstances, was down more than 3% at $4.62. The key exchange traded fund covering the sector, the Market Vectors Coal ETF (NYSEMKT: KOL) was down 2% at $18.27

Alpha Natural Resources, the worst hit in the Goldman Sachs call, was down almost 7% at $5.12 in mid-day trading. Its stock has traded in a range of $4.78 to $9.05 in the past 52-weeks.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.