Whitehaven Coal Ltd (ASX: WHC) shares have been trading positively since the release of the company's quarterly report this week, but what are they worth over the longer term?
I've had a look at two brokers reports issued following the quarterly results. Both have bullish share price targets on the stock, which we'll get to shortly.
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Solid quarterly results
Firstly, let's have a look at what Whitehaven reported this week.
The coal producer said it had generated sales of 6.8 million tonnes of coal for the March quarter, broadly in line with the December quarter.
On the upside, coal prices were much stronger over the period, with metallurgical coal prices up 18% and thermal coal prices up 11% quarter on quarter.
The company also said it was on track to deliver $60-$80 million in annualised cost savings by the end of June.
Managing director Paul Flynn said regarding the quarterly results:
Production in the March quarter was broadly in line with plan reflecting strong outcomes from NSW open cut operations and solid results from Queensland operations in a weather impacted quarter. For the first nine months of the year we have produced 29.5Mt of ROM, and we are on track to be firmly in the upper half of guidance for FY26. "Equity sales of 6.8Mt for the quarter were also strong and are tracking at the upper end of guidance for the year. Revenue mix for the quarter was ~58% from metallurgical coal sales and ~42% from thermal coal sales.
Mr Flynn said Whitehaven's financial position was strong, and the successful refinancing of the company's debt facilities would deliver considerable cost savings in the order of $50-$55 million per annum.
The company said in its statement to the ASX that coal prices were given a boost by the war in the Middle East, caused by the tightening of gas supplies and the potential for end users to switch from gas to coal for energy production.
The company said it was expecting strong pricing across both metallurgical and thermal coal.
It said:
The expected structural shortfall in global metallurgical coal production, particularly the long-term depletion of hard coking coal from Australian producers combined with increased seaborne demand from India, is anticipated to drive higher metallurgical coal prices over the long-term. Whitehaven's metallurgical coal portfolio is expected to benefit from these supply constrained market dynamics.
Shares looking like good value
The analyst team at Morgans had a look at the quarterly and said Whitehaven delivered exceptional results for saleable coal production and actual sales.
Morgans has an accumulate rating on the stock and a 12-month price target of $9.20, compared with $8.12 currently.
The analyst team at Macquarie said it was a strong result on the production front, and the company's focus on costs was a positive.
Macquarie has a price target of $9.75 on Whitehaven shares.
Whitehaven Coal is valued at $6.6 billion.
