Wesfarmers affected by change in coal prices
09 Apr 2015
Deutsche Bank has a "hold" recommendation on Wesfarmers and a $41 price target.
Talking about the conglomerate's coal division in the Curragh and Bengalla companies, Deutsche writes: "Modest coal price assumption changes but FX revisions drive 0.5-1 per cent upgrades. We have moved to revised coal price and FX assumptions.
"As usual, our Curragh hard coking, PCI and semi soft as well as Bengalla thermal coal prices are derived from DB global commodity forecasts. Our FX assumptions remain derived from the Bloomberg forward curve.
"The key Curragh HCC assumption remained largely unchanged but the devaluation of the AUD vs the USD implies significantly higher A$ coal prices. This, along with a modest benefit to the WESCEF business drove earning upgrades of
0.4 per cent in FY15, 0.8 per cent in FY16 and 1.4 per cent in FY17."
source: http://www.afr.com/markets