UPDATE: BMO Capital Markets Downgrades Alpha Natural Resources as More Production Cuts are Expected

In a report published Friday, BMO Capital Markets analyst Meredith Bandy downgraded the rating on

from Market Perform to Underperform, and lowered the price target from $5.00 to $4.00. In the report, BMO Capital Markets noted, “BMO Research is downgrading Alpha Natural Resources to Underperform from Market Perform. Alpha continues to face headwinds in Appalachia due to cheap natural gas pricing and increased environmental regulation. BMO Research is forecasting ANR's Central Appalachian thermal coal production to decline by approximately 10Mtpa in 2014 based on lower coal pricing. ANR had previously indicated that as much as 10Mtpa of thermal coal production was incidental to met coal production and would not be cut, but in a looser coal market, that number may be substantially lower. BMO Research continues to prefer coal equities without exposure to high-cost Central Appalachian production, such as Peabody Energy (BTU-NYSE, US$17.40, Outperform).” Alpha Natural Resources closed on Thursday at $5.97.