UPDATE: Goldman Sachs Downgrades Cloud Peak Energy to Neutral, Lowers PT on Less Constructive Price, Volume Outlook

In a report published Friday, Goldman Sachs analyst Neil Mehta downgraded the rating on Cloud Peak Energy CLD from Buy to Neutral, and lowered the price target from $19.00 to $15.00. In the report, Goldman Sachs noted, “We downgrade Cloud Peak Energy (CLD) from Buy to Neutral given (1) a modestly lower PRB coal price outlook, (2) concerns about declining long-term coal volumes due to coal plant retirements and (3) limited free cash flow generation on estimates now well below consensus. Since being added to the Americas Buy list on March 3, CLD returned -10% versus the S&P500 +12% and other coal stocks -13%. In the last 12 months, CLD returned - 17% versus the S&P500 +17% and other coal stocks -18%. Drivers of underperformance versus the S&P500 include a slower-than-expected recovery in PRB prices and operational challenges in 2013 driving lower guidance.” Cloud Peak Energy closed on Thursday at $14.90.