Whitehaven share price could surge 45% if coal price remains strong: broker

Could the Whitehaven Coal share price have any more upside?

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Key points

  • The Whitehaven Coal share price has soared 148% in a year
  • The company's share price closed flat on Monday
  • Coal prices are predicted to increase further due to a tightening market 

The Whitehaven Coal Ltd (ASX: WHC) share price has rocketed 72% in the year to date, but could it surge even more?

The company’s shares finished flat on Monday at $4.49 apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) edged just 0.1% higher today.

Let’s check the outlook for Whitehaven Coal.

Price target lift

The Whitehaven share price may be on fire this year, but the team at Morgans believes it can go even higher.

Whitehaven operates coal mines in New South Wales and Queensland.

Analysts at Morgans have lifted their price target on the company’s shares to $5.20. This is 15.8% more than today’s closing price. The broker has pushed the company’s earnings estimates higher due to rising thermal coal price predictions. Morgans expects this could lead to big dividends in the short term.

Further, the broker believes the company’s share price could climb even higher to $6.53, according to a report in the Australian Financial Review. This is 45% more than today’s closing price. Morgans analyst Tom Sartor reportedly said:

We sense recent energy market dynamics has awakened a wider investor set to the importance of thermal coal.

The coal price has exploded 213.21% in a year, Trading Economics data reveals. Meanwhile, the European ban on Russian coal could tighten global coal markets further, creating a domino effect, oilprice.com reported.

Share price snapshot

The Whitehaven share price has soared 148% in the past year while it has gained nearly 14% in a month.

For perspective, the S&P/ASX 200 Index has returned 7% in the past year.

Whitehaven has a market capitalisation of $4.56 billion based on its current share price

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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