Saying liabilities and loss of equity capitalization is probably reflected in the stock price, FBR Capital (Nasdaq:FBCM) said it is maintaining its "Outperform/Top Pick" rating on Pacific Gas & Electric Co. (NYSE:PCG).
PG&E has liability insurance of $992 million, which most think should cover all costs, although there are concerns it could go above that by the company.
FBR said, "Our first blush reaction is that the equity market capitalization lost exceeds the likely monetary impact to shareholders. According to preliminary reports, 38 homes were destroyed, seven were significantly damaged, and as many as 6 people lost their lives. This may total to about $100 million in damages using very rough math. Additional costs from litigation, fines levied, emergency response costs, pipeline and other infrastructure repairs, are likely to increase this amount substantially."
Four people actually have lost their lives, with three being in critical condition and who may not make it.
PG&E lost over $1 billion in market cap on Friday, plummeting $4.03, or 8.35 percent, to close at $44.21.
Showing posts with label FBR Capital Markets. Show all posts
Showing posts with label FBR Capital Markets. Show all posts
Monday, September 13, 2010
Thursday, September 9, 2010
FBR Capital Reiterates "Outperform" on Weatherford (NYSE:WFT)
FBR Capital was quick to jump to what appears to be the defense of Weatherford International Ltd. (NYSE:WFT), maintaining their "Outperform" on the oilfield services company.
"Weatherford is under-performing its peers today by roughly 400 bps due in large part to what we believe is an over-reaction to one of the findings of BP's (NYSE:BP) Macondo blowout investigation report. BP's report concluded that the hydrocarbon influx occurred through the casing shoe track as opposed to a failure of the casing or the wellhead. This concern has prompted some investors to sell or short WFT shares assuming the company may have some liability for the blowout. We believe this concern is baseless...As such, we believe the sell-off in WFT today is not warranted by the facts presented in BP's report," said FBR Capital analyst Robert MacKenzie.
Weatherford closed Wednesday's trading session at $15.47, down $0.08, or 0.51 percent. The trading volume soared during the sell-off, rising to 27,891,983 shares, way up from the 3-month average of 12,922,000.
"Weatherford is under-performing its peers today by roughly 400 bps due in large part to what we believe is an over-reaction to one of the findings of BP's (NYSE:BP) Macondo blowout investigation report. BP's report concluded that the hydrocarbon influx occurred through the casing shoe track as opposed to a failure of the casing or the wellhead. This concern has prompted some investors to sell or short WFT shares assuming the company may have some liability for the blowout. We believe this concern is baseless...As such, we believe the sell-off in WFT today is not warranted by the facts presented in BP's report," said FBR Capital analyst Robert MacKenzie.
Weatherford closed Wednesday's trading session at $15.47, down $0.08, or 0.51 percent. The trading volume soared during the sell-off, rising to 27,891,983 shares, way up from the 3-month average of 12,922,000.
Friday, September 3, 2010
UBS (NYSE:UBS), FBR, KeyBanc All Maintain Walter Energy (NYSE:WLT) Ratings
UBS (NYSE:UBS) FBR Capital, KeyBanc all maintained their ratings on Walter Energy (NYSE:WLT), although they did lower their price targets on the company.
UBS maintained their "Buy" rating on Walter, while lowering their price target from $112 to $111.
UBS analyst Shneur Z. Gershuni, said, "We expect WLT will likely trade lower on the news (lowered production guidance); however, we would view any weakness as a buying opportunity...Additionally, despite the lost earnings we expect WLT to generate 900mm of FCF over the next two years and expect share repurchases to continue."
They consider the weak price an opportunity to buy.
FBR Capital reiterated their 'Outperform' Rating, while lowering their outlook for the fourth quarter of 2010. They also lowered the price target from $88 to $87.
FBR said, "...we are lowering our 2010 EPS/EBITDA estimates by about 9% and our price target by $1.00, primarily to reflect the lowered volume and increased cost guidance announced by the company yesterday evening, partially offset by a higher-than-expected 4Q10 met coal settlement. The issue surrounds starting up the new longwall panel, which traditionally could be an issue for any underground company. Regarding those with a short-term time horizon, we would suspect that some will take profits..."
KeyBanc also reiterated their "Buy" rating on the energy company, while adjusting the earnings per share at Mine No. 4 Setback.
"We are reiterating our rating on shares of WLT, but lowering our 2010 and 2011 EPS estimates following the Company's business update issued after the market close. Our 2010 EPS estimate goes to $8.25 (from $9.30), while our 2011 estimate moves to $11.00 (from $12.25)...Our new 2010 estimate now reflects lower shipments and operating profit per ton in light of production difficulties WLT has encountered at Mine No. 4, which are expected to impact 3Q production costs at the mine and have the delayed effect of reducing 4Q shipment levels," said the KeyBanc analyst.
UBS maintained their "Buy" rating on Walter, while lowering their price target from $112 to $111.
UBS analyst Shneur Z. Gershuni, said, "We expect WLT will likely trade lower on the news (lowered production guidance); however, we would view any weakness as a buying opportunity...Additionally, despite the lost earnings we expect WLT to generate 900mm of FCF over the next two years and expect share repurchases to continue."
They consider the weak price an opportunity to buy.
FBR Capital reiterated their 'Outperform' Rating, while lowering their outlook for the fourth quarter of 2010. They also lowered the price target from $88 to $87.
FBR said, "...we are lowering our 2010 EPS/EBITDA estimates by about 9% and our price target by $1.00, primarily to reflect the lowered volume and increased cost guidance announced by the company yesterday evening, partially offset by a higher-than-expected 4Q10 met coal settlement. The issue surrounds starting up the new longwall panel, which traditionally could be an issue for any underground company. Regarding those with a short-term time horizon, we would suspect that some will take profits..."
KeyBanc also reiterated their "Buy" rating on the energy company, while adjusting the earnings per share at Mine No. 4 Setback.
"We are reiterating our rating on shares of WLT, but lowering our 2010 and 2011 EPS estimates following the Company's business update issued after the market close. Our 2010 EPS estimate goes to $8.25 (from $9.30), while our 2011 estimate moves to $11.00 (from $12.25)...Our new 2010 estimate now reflects lower shipments and operating profit per ton in light of production difficulties WLT has encountered at Mine No. 4, which are expected to impact 3Q production costs at the mine and have the delayed effect of reducing 4Q shipment levels," said the KeyBanc analyst.
Friday, July 23, 2010
Peabody Energy (NYSE:BTU) Declares Quarterly Dividend on Common Stock
The Board of Directors for Peabody Energy (NYSE:BTU) declared a quarterly dividend on common stock of the company of $0.07 a share, or $0.28 on an annual basis.
It will be offered to shareholders of record as of August 6, 2010, and will be payable on August 27, 2010. The yield on the dividend is 0.6 percent.
Peabody, which is the largest private-sector coal company in the world, also had analysts at FBR Capital reiterate an "Outperform/Top Pick" rating on their shares recently, and retain a price target of $55.00 a share.
They said in a note to clients Thursday, “Yesterday, BTU reported solid 2Q10 estimates, raised its midpoint of 2010 guidance, and reiterated its view on the coal super-cycle (we call it “COALbalization”). We were positioned near the top end of guidance and are trimming estimates slightly to account for 4Q10 met coal price risk and modest U.S. steam volumes. Specifically, we are lowering our 2010–12 EBITDA estimates for BTU by an average 2% and reducing our EPS estimates by an average 8%, reflecting lower U.S. steam volumes and slight, below-expectations contracting…We are lowering our 2010 EPS/ EBITDA estimates to $3.00/$1,844M from $3.12/$1,847M…We are also lowering our 2011 EPS/ EBITDA estimates to $3.85/$2,138M from $4.29.$2,218M to reflect about 5 MT lower U.S. volumes and slightly lower pricing for Colorado coal, which got contracted during the current quarter.”
It will be offered to shareholders of record as of August 6, 2010, and will be payable on August 27, 2010. The yield on the dividend is 0.6 percent.
Peabody, which is the largest private-sector coal company in the world, also had analysts at FBR Capital reiterate an "Outperform/Top Pick" rating on their shares recently, and retain a price target of $55.00 a share.
They said in a note to clients Thursday, “Yesterday, BTU reported solid 2Q10 estimates, raised its midpoint of 2010 guidance, and reiterated its view on the coal super-cycle (we call it “COALbalization”). We were positioned near the top end of guidance and are trimming estimates slightly to account for 4Q10 met coal price risk and modest U.S. steam volumes. Specifically, we are lowering our 2010–12 EBITDA estimates for BTU by an average 2% and reducing our EPS estimates by an average 8%, reflecting lower U.S. steam volumes and slight, below-expectations contracting…We are lowering our 2010 EPS/ EBITDA estimates to $3.00/$1,844M from $3.12/$1,847M…We are also lowering our 2011 EPS/ EBITDA estimates to $3.85/$2,138M from $4.29.$2,218M to reflect about 5 MT lower U.S. volumes and slightly lower pricing for Colorado coal, which got contracted during the current quarter.”
Wednesday, July 7, 2010
Walter Energy (NYSE:WLT) Upgraded by FBR Capital Markets (Nasdaq:FBCM)
At one point in the trading day Tuesday, Walter Energy Inc. (NYSE:WLT) climbed 5.9 percent, peaking around 10:30 AM EDT, as FBR Capital Markets (Nasdaq:FBCM) upgraded the company from "Market Perform" to "Outperform."
Walter Energy had been moving nice on the year until about April 15, when they reached their 52-week high of $99.45 a share. It's been downhill since then, with the company plunging in value since then.
At the end of the trading session Tuesday, Walter finished at $61.27, down slightly by $0.19, or 0.31 percent.
Walter produces coal for the steel industry.
Walter Energy had been moving nice on the year until about April 15, when they reached their 52-week high of $99.45 a share. It's been downhill since then, with the company plunging in value since then.
At the end of the trading session Tuesday, Walter finished at $61.27, down slightly by $0.19, or 0.31 percent.
Walter produces coal for the steel industry.
Wednesday, June 2, 2010
Arch Coal (NYSE:ACI) 'Outperform' Rating Maintained
After spending time with Arch Coal (NYSE:ACI) executives while traveling with them, FBR Capital Markets said it is maintaining its 'outperform' rating on the coming, as well as their $39 price target.
FBR said, "(We) came away with our view reinforced that the company is well positioned in the more stable U.S. domestic market and can capitalize on the growing international market... Arch Coal is benefiting from rising met coal demand and expects to sell up to 7 MTs this year and over 8 MTs in 2011. Management expects to export about 5.5 MTs in 2010... Arch Coal will generate, approximately, $1,280 million of free cash flow through 2012. Management stated it will repay debt, buy back stock, develop its reserves, and look for acquisitions; the highest return will capture future capital."
Another factor in the decision is the safety measures implemented by Arch Coal which has highly reduced accidents.
FBR added, "With the UBB and other mining disasters known, investors were laser focused on Arch Coal's strong safety culture and what new underground rules were likely to be implemented. Arch's management has installed a behavior-based safety system that pushes decision making down to all levels and has resulted in a 50% decline in lost-time incidents."
FBR said, "(We) came away with our view reinforced that the company is well positioned in the more stable U.S. domestic market and can capitalize on the growing international market... Arch Coal is benefiting from rising met coal demand and expects to sell up to 7 MTs this year and over 8 MTs in 2011. Management expects to export about 5.5 MTs in 2010... Arch Coal will generate, approximately, $1,280 million of free cash flow through 2012. Management stated it will repay debt, buy back stock, develop its reserves, and look for acquisitions; the highest return will capture future capital."
Another factor in the decision is the safety measures implemented by Arch Coal which has highly reduced accidents.
FBR added, "With the UBB and other mining disasters known, investors were laser focused on Arch Coal's strong safety culture and what new underground rules were likely to be implemented. Arch's management has installed a behavior-based safety system that pushes decision making down to all levels and has resulted in a 50% decline in lost-time incidents."
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