Walter Energy to See Limited Growth Through 2016

Walter Energy, Inc. WLT is having coverage initiated with a Neutral rating due to its marginal upside following Outperformance, visible growth and reinvestment options, and fewer NT-company specific catalysts vs Buy-rated peers, Goldman Sachs reports. Walter Energy has expanded met coal production to 9.0-9.5M tons by 2012 from 6.1M tons in 2009, limited volume growth potential until 2016 means higher met prices or M&A would be required for Walter to increase earnings/cash flow, according to Goldman. Goldman issues Walter with a $94 price target, seeing 24% return potential vs. the 32% average for Buy-rated stocks. Walter Energy, Inc. closed yesterday at $76.05.