SunCoke Energy’s Strategic Acquisition of Phoenix Global: A Catalyst for Growth and Stability

Nathan Martin, an analyst from Benchmark Co., maintained the Buy rating on Suncoke Energy (SXC – Research Report). The associated price target remains the same with $13.00.

Nathan Martin has given his Buy rating due to a combination of factors including SunCoke Energy’s strategic acquisition of Phoenix Global. This acquisition is set to diversify SunCoke’s business operations and expand its presence into the electric arc furnace (EAF) space, which is a growing sector in the steel industry. The purchase is expected to be immediately accretive, contributing to the company’s earnings and offering potential synergies valued between $5 million and $10 million annually.
Furthermore, the acquisition will allow SunCoke to broaden its customer base and product offerings, both in domestic and international markets. The long-term nature of Phoenix’s contracts, with a weighted average life of six years, provides revenue stability with limited exposure to commodity price fluctuations. This strategic move, alongside the company’s commitment to maintaining its dividend and pursuing the GPI project at Granite City, underscores SunCoke’s growth potential and financial stability, justifying the Buy rating.