UPDATE: Goldman Sachs Upgrades Alpha Natural Resources to Neutral, Reiterates $6 PT as Met Coal Price Has Likely Bottomed

In a report published Friday, Goldman Sachs analyst Neil Mehta upgraded the rating on Alpha Natural Resources ANR from Sell to Neutral, and reiterated the $6.00 price target. In the report, Goldman Sachs noted, “We transfer coverage of Alpha Natural Resource (ANR) and raise our rating from Sell to Neutral as met coal prices likely bottomed. We prefer ACI as a Sell, a more diversified coal name, which faces headwinds from both met and thermal segments of the business – and also trades at higher EV/EBITDA multiples on long-term earnings. We raise our 6-month EV/EBITDA-based price target from $4 to $6 based on higher EBITDA reflecting higher cash margins than before and lower net debt. Since adding ANR to the Americas Sell list on May 6, 2013, the stock returned -14% versus the S&P500 +5% and our coal stocks of -10%. In the last 12 months, ANR returned -10% versus the S&P500 of +17% and other coal stocks -19%.” Alpha Natural Resources closed on Thursday at $6.22.