JSW Drops as Societe Generale Cuts Target on Coal: Warsaw Mover
Jastrzebska Spolka Weglowa SA (JSW) slumped to a six-week low after Societe Generale SA lowered its share-price estimate for the European Union’s biggest coking coal producer and maintained its sell recommendation.
The stock fell 2.4 percent to 84.60 zloty by the close in Warsaw, the lowest since Sept. 5. Turnover stood at 111 percent of the daily average from the past three months, data compiled by Bloomberg show.
While coking coal prices are seen “bottoming in the fourth quarter, we do not envisage a quick recovery to the levels” seen in the first half of 2011, Leszek Iwaszko, an analyst at Societe Generale in Warsaw, said in a research note. The bank cut its price projection to 76 zloty from 84.5 zloty.
“Despite the recent underperformance of the JSW share price, we think that the lower earnings outlook has not yet been discounted by the market,” Iwaszko said.
The company, which plans to publish its third-quarter results on Nov. 8, expects coal prices to stay “low” this quarter and in 2013, Chief Executive Officer Jaroslaw Zagorowski said on TVN CNBC on Oct. 19.
The miner, whose market capitalization stands at 10 billion zloty ($3.1 billion), has gained 0.6 percent this year, compared to a 7.7 percent advance by the WIG20 Index.
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