Morgan Stanley Upgrades Arch Coal

Analyst R. Wayne Atwell says he sees a major move in the pricing of coal from the Powder River Basin

Morgan Stanley upgrades Arch Coal (ACI ) to overweight from underweight.

Analyst R. Wayne Atwell says he sees an earnings growth story emerging. He expects Arch Coal to close a valuation gap with its peers on exposure to stronger pricing in the western bituminous region, increased coal availability, and the likelihood of a major move in the pricing of coal from the Powder River Basin.

He increases his $3.31 2006 earnings per share to $3.90 and $4.00 2007 earnings per share to $4.54. He sets a $52 target price.

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