The coal producer’s shares are steaming ahead with the company set to report its FY21 result later this week.
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At the time of writing, Whitehaven shares are up 6.1% to $2.26. It’s worth noting that the company’s share price is within reach of breaking its 52-week high of $2.43 achieved on 12 August.
Let’s take a closer look at what could be driving these gains today.
Whitehaven shares on the rise
With no market-sensitive news out of the company since its June quarterly report, it appears investors are reacting to a series of broker notes.
Goldman Sachs remains confident in Whitehaven, raising its 12-month price target by 18% to $2.60.
Its analysts are predicting a soft result for FY21 followed by a bumper performance by December 2021.
The broker highlighted that the company is aiming to halve its net debt to $300 million by the end of the year. To that end, management has doubled down on controlling costs, resulting in savings across the business. In addition, free cash flow is expected to generate more than $500 million from realised coal prices.
As such, Whitehaven is expected to report the following for its FY21 result:
Total revenue is estimated to be approximately $1,580 million, which is 8.5% below FY20’s $1,725 million.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is projected to stand at $201 million, down 34.3% from the prior corresponding period ($306 million).
No final dividend to be declared; however, this is assumed to be reinstated in February 2022.
Shaw & Partners raised its outlook by 4% to $2.60 as well. This implies an upside of around 15% based on the current Whitehaven share price.
The last broker to weigh in on Whitehaven shares came from Morgans, adding 15% to $2.65.
Whitehaven share price summary
In the past 12 months, Whitehaven shares have surged almost 80%, with year-to-date gains closing in on 40%.
Whitehaven commands a market capitalisation of roughly $2.34 billion, making it the 182nd largest company on the ASX.
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How did the Whitehaven (ASX:WHC) share price respond last earnings season?
Whitehaven (ASX:WHC) share price leaps 3% amid soaring thermal coal prices
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.