New Hope Corporation Ltd (ASX: NHC) shares are down 1.76% in lunchtime trade on Wednesday. At the time of writing, the ASX coal stock's shares are changing hands at $5.01 a piece. But today's decline comes off the back of a string of daily share price gains.
At the time of writing, New Hope shares are now 23.58% higher for the year to date and 24.81% higher over the year.
Image source: Getty Images
What has driven New Hope shares higher this year?
New Hope shares have climbed this year thanks to a combination of improving coal prices, solid production figures, and news of new capital-market buybacks. Analysts' ratings also helped drive the share price higher.
Coal prices jumped 8% in late January and have then surged another 16% over the past five days. At US$138 per tonne, coal is currently sitting at its highest level since December 2024. It's also 18.86% higher over the month and 35.96% higher than a year ago. And these types of increases have been great news for coal stocks like New Hope.
The coal price isn't the only thing supporting New Hope shares. The company also posted a solid quarterly update in mid-February. At the time, it announced that its group coal sales were up 8.2% over the quarter and production was 4.8% higher. Underlying EBITDA of $106.9 million was steady.
Meanwhile, just yesterday, New Hope extended its on‑market share buyback program through to March 2027. This is part of the company's ongoing capital management strategy.
Following the flurry of company updates and the shift in the coal price, many analysts have updated their ratings on New Hope shares.
What do analysts expect from New Hope shares now?
TradingView data shows that analysts are relatively bearish about the outlook for New Hope shares this year. Out of seven analysts, four have a hold rating, and three have a strong sell rating. The average target price is $4.27, which implies a potential 15.09% downside at the time of writing.
Morgans said it thinks the company is positioned to achieve the top end of its New Acland 3 guidance range. The broker has a hold rating and $5 target on the stock.
Meanwhile, the team at Bell Potter are bearish on New Hope shares. The broker has a sell recommendation, along with an updated price target of $4.10, citing a subdued thermal coal price outlook.
But not everyone is pessimistic about the company's outlook. Analysts at Baker Young recommended New Hope shares as a buy to investors in early February. The broker said that the extension of Origin Energy's Eraring coal-fired power station is a reminder that demand for thermal coal is likely to remain robust for longer than many investors believe. Analysts added that New Hope has a strong balance sheet, and the market is undervaluing the company's growth potential.
