Ramaco Resources initiated with a Sell at Goldman Sachs

Goldman Sachs analyst Brian Lee initiated coverage of Ramaco Resources (METC) with a Sell rating and $16 price target which implies 20% downside. The company’s valuation has “materially increased above historical levels” given the U.S. focus to establish domestic rare earth capabilities to reduce reliance on China, the analyst tells investors in a research note. Goldman believes Ramaco still needs to “meaningfully derisk” its Brook Mine asset to warrant its current valuation. The low grade nature of the deposit will lead to higher production costs and significant capital needs, contends the firm.