Dallas, Texas 10/23/2013 (Financialstrend) – On October 18, BMO capital downgraded the rating for $1.34 billion market capitalized Alpha Natural Resources, Inc. (NYSE:ANR) from market perform to a lower under-performing stock. The analysts firm has sighted the continued low price of natural gas coupled with increasingly stringent regulatory policies being framed to protect the environment in U.S. as main reasons for the lowering of the prospects of this metals and minerals mining company.
Throwing light on the broader macroeconomic scenario that this mining firm operates in, the report goes on to highlight that the demand for gold in China is going up while the cost of manufacturing are going down. But it points out that the regulatory compliance’s companies need to adhere to protect environment in U.S. stifles the prospects of companies like Alpha Natural Resources, Inc. (NYSE:ANR).
Readers should also note that the downgrading of Alpha coincided with upgrading of sector leader Peabody Energy to outperform by BMO Capital on the back of strong 3Q performance and a robust guidance for 4Q.
Thanks to these inherently downcast valuations by the third party agencies, the stock had plummeted by 0.66% of its market valuation in the previous week’s trading. It is down 3.35% in the past month and has shed close to 33% of its valuations in the past 12 months.
During trading on October 22, the stock appreciated by close to 5% to regain some of its lost valuation. While assigning a specific reason for the stock’s robust performance is difficult, the fact that the stock is on the move again to meet price target of $7.06 would have gladdened the long term investors in this stock. At close of business on October 22, ANR was trading at $6.06 per share.