Investors who snapped up Whitehaven Coal Ltd (ASX: WHC) shares five years ago will have earned some benchmark-smashing returns.
On 31 July 2020, you could have bought shares in the S&P/ASX 200 Index (ASX: XJO) coal stock for $1.39 apiece.
At market close on Monday, those same shares are changing hands for $6.66 each. That works out to a five-year gain of 379%. Or enough to turn a $6,000 investment into $28,740. Atop those capital gains, Whitehaven shares also trade on a fully franked 3.3% trailing dividend yield.
For some context, the ASX 200 has gained 46.73% over this same period.
More recently, Whitehaven Coal shares are up 6.05% in 2025. Shares have slipped 7.24% from the recent highs posted at market close on 23 July.
The ASX 200 coal stock closed in the red on Friday following the release of the company's June quarter results.
Which brings us back to our headline question…
Should I buy, sell, or hold Whitehaven Coal shares?
Following the coal miner's update on Friday, the analysts at Macquarie Group Ltd (ASX: MQG) reviewed their 12-month outlook for Whitehaven Coal shares.
Digging into the June quarter results, here's what Macquarie said it liked:
Production solid: ROM coal production beat (+14%) with Blackwater the key contributor at 4.1mt (+17%) after a wet 3QFY25. Daunia also beat at 1.5mt (+7%). We increased our ROM assumptions across QLD Coal, Maules Creek and Gunnedah, increasing Group production by 2% from FY26-30.
We also resequence the next Narrabri longwall move back 3 months to FY28.
But the broker wasn't bullish about everything in the coal miner's quarterly update, pointing to the currently weak coal market as dragging on Whitehaven Coal shares.
Here's what Macquarie said it didn't like:
QLD realised prices of A$209/t were 6% below consensus and our forecasts in AUD terms, with slightly more HCC/SHCC in the mix and HCC flat QoQ but SSCC 13% lower QoQ. WHC's group average realised price of A$189/t was 5% lower than consensus given the QLD difference, but was broadly in line with our expectations.
However, even with the subdued market, WHC still generated some positive free cash flow in the quarter (adjusting for one-of tax and transaction payments).
Commenting on the weak market conditions dragging on Whitehaven Coal shares on Friday, Whitehaven CEO Paul Flynn said, "Whitehaven is managing well through the current soft pricing environment."
He added that the company's focus on cost management "is reflected in the estimated AU$139 per tonne cost of coal for FY 2025, which is better than our cost guidance for the year".
Connecting the dots, Macquarie said:
The 4QFY25 was solid at the mine level, with sales and costs in line. Price realisations were the only miss, with net debt stronger. We increase our target price on our stronger production outlook and capex deferrals conserving capital.
The broker increased its 12-month target price for Whitehaven Coal shares by 27% to $7.00, based on higher production in the longer term, while maintaining its neutral (or hold) rating.
That represents a potential upside of 5% from Monday's closing price. And it doesn't include any upcoming dividends.
Whitehaven Coal is scheduled to release its complete FY 2025 financial results and FY 2026 guidance on 21 August.
