Whitehaven Coal Ltd (ASX: WHC) shares are down 2.65% to $6.61 per share on Tuesday.
Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.73%.
Last month, Whitehaven Coal released its June quarterly results.
Judging by the 1.1% share price fall on the day, Whitehaven Coal investors were nonplussed by the numbers.
Whitehaven reported a 15% quarter-over-quarter increase in managed run-of-mine (ROM) coal production to 10.6 million tonnes.
Whitehaven's full-year FY25 ROM coal production rose 60% on FY24 to 39.1 million tonnes, at the top end of the miner's guidance range.
The miner said this was because FY25 was its first full year of ownership of the Blackwater and Daunia coal mines.
(Whitehaven Coal bought the mines from BHP Group Ltd (ASX: BHP) and Mitsubishi Alliance (BMA) in April 2024. In August, Whitehaven sold a 30% stake in Blackwater to Nippon Steel Corp and JFE Holdings Inc for US$1.08 billion.)
Whitehaven received an average price of AU$189 per tonne of coal over the June quarter, down 7% from the March quarter.
Whitehaven CEO Paul Flynn said the company was managing well amid softer coal prices.
Flynn said:
Our focus on cost management is reflected in the estimated A$139/t cost of coal for FY25, which is better than our cost guidance for the year.
We haven't heard anything else from Whitehaven Coal since it reported its June quarter numbers on 25 July.
On the back of that June data, top broker Macquarie maintained its neutral rating on Whitehaven Coal shares.
The broker issued a note and raised its 12-month price target from $5.50 to $7, a substantial 27% lift.
At the time, Macquarie said it had raised its target price "on our stronger production outlook and capex deferrals conserving capital".
Today, Macquarie issued a revised note ahead of Whitehaven's full-year results on Thursday.
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Macquarie downgrades price target on Whitehaven Coal shares
In today's note, Macquarie said it now expects higher production costs for Whitehaven's NSW business based on industry trends.
The broker said:
We increase our FY26e unit costs by 4% to A$128/t, rebasing our unit cost drivers in NSW and lowering the sales mix of the lower cost Narrabri. We also increase Blackwater production, increasing the thermal coal production capacity by 0.5mtpa.
The changes result in a 16% drop in our NAV.
The cost revisions prompted Macquarie to downgrade its price target for this ASX 200 coal share from $7 to $6.50.
We increase costs in NSW noting escalation across the industry, but are happy being lower than consensus as we are optimistic management can deliver operational synergies across the portfolio.
The broker kept its neutral rating in place.
Dividend prediction
Macquarie expects Whitehaven Coal shares to pay a final dividend of 5 cents per share.
This would take the full-year dividend to 14 cents per share, which would give Whitehaven Coal shares a trailing dividend yield of 2.1%.
