Dahlman Rose Has Buy Rating On Walter Energy (WLT)

Dahlman Rose & Co. has a Buy rating and a $148 price target on shares of Walter Energy WLT, after the company updated 2011 guidance. In a note to investors, Dahlman Rose writes, "Walter lowers Alabama met guidance, provides Western outlook Walter reported 1Q11 adjusted EBITDA of $158MM versus our $159MM forecast and $171MM for consensus. Results excluded operations acquired in the April 1 Western Coal transaction. Cash operating costs of $93/ton were higher than our $84/ton, offset by 100K tons in higher-than-expected sales. Updated guidance for the Alabama operations was given at 7.5-8.0MM versus "at best" 8.5MM previously (both include up to 500k tons of purchase coal). On the Western Coal side management guided 2Q11-4Q11 met sales of 4.9-5.3MM metric tons versus our 4.8MM ton previous estimate." Dahlman Rose goes on to say, "We have revised our Walter Energy earnings estimates to include Western Coal's operations beginning April 1. We forecast 7.2MM metric tons and 8.8MM short tons of 2012 metallurgical production for the Western and Walter assets, respectively, using our current price deck of $250/metric ton for low-vol product. Our EBITDA forecast is now $1,795MM and $2,101MM in 2011 and 2012, respectively. We are reiterating our Buy rating and $148 price target on WLT shares." Shares of WLT lost $1.04 yesterday to close at $135.34.