Core Natural Resources initiated with a Buy at UBS

UBS initiated coverage of Core Natural Resources (CNR) with a Buy rating and $80 price target The firm sees a buying opportunity in this “high-quality diversified” U.S. coal miner which “faces uncertainty on several fronts,” including realization of merger synergies, ability to recover from a fire-driven loss in Q1, insurance payouts, and the sustainability of the buyback. Core Natural has a strong balance sheet, resilient pricing and robust free cash flow generation which will allow it to deliver 75% of cash flow to shareholders, mainly through a $1B buyback program, the analyst tells investors in a research note. UBS says that despite the challenged short-term coal price outlook, it sees positive stock specific catalysts over the next 6-12 months offering an attractive entry point with a “2:1 upside/downside skew along with limited downside risk.”