Straits Asia: CIMB resumes coverage with Underperform rating and $3.29 TP. House adopts a cautious stance on the stock following its sharp appreciation, which in view has not been supported by significant improvements in fundamentals. Add that SAR’s stock has climbed to a 52- wk high despite the benchmark Newcastle Coal retreating 15% from its Jan highs…..
Add that the stock has outperformed both the benchmark Newcastle coal and several of its peers over the past twelve mohs, and now trades at 12.5x FY12 P/E vs its peers’ 10.2x average. Add that de-rating catalysts may stem from lower-than-expected ASP or delays in production ramp-up.
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