FBR Capital Remains Bullish on Arch Coal (ACI)

FBR Capital Remains Bullish on Arch Coal (ACI)


Coal producer Arch Coal, Inc. (ACI) on Monday saw its “Outperform/Top Pick” rating reiterated on Monday by analysts at FBR Capital Markets.

The firm also backed its $37 price target on ACI, which represents a massive 41% expected upside to the stock’s Friday closing price of $26.24.

An FBR analyst commented, “We attended the Arch Coal analyst day and came away with conviction in our thesis that Arch Coal is in position for significant stock price appreciation and an FBR Top Pick. The company has been transformed over a long time to a low-cost, safe steam and met coal mining company. While the stock has not been rewarded for its underutilized capacity and short-term contracting strategy yet, we believe the company is on the cusp of generating solid rates of return above its cost of capital.”

Arch Coal shares were mostly flat in premarket trading Monday.

The Bottom Line
Shares of ACI have a 1.52% dividend yield, based on Friday’s closing stock price of $26.24. The stock has technical support in the $22-$23 price area. If the shares can firm up, we see overhead resistance around the $28-$30 price levels. We would remain on the sidelines for now.

Arch Coal, Inc. (ACI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.