Boston, MA 01/27/2014 (wallstreetpr) – Alpha Natural Resources, Inc. (NYSE:ANR) was one of the lackluster stocks of 2013 and its predicaments mirrored industry challenges that have also caught up with its peers. The declines in demand for iron ore have contributed to slowdown in demand for metallurgical coal and this affects ANR and other met coal producers such as Water Energy and Cliff Natural Resources.
But besides the industry-challenges ANR also has company-specific challenges to address in order to realize full recovery from the worst-performing 2013.
Drivers for future growth
Like most other metallurgical coal producers, the real future growth driver for Alpha Natural Resources, Inc. (NYSE:ANR) is in a robust steel industry. It does happen that increased production of steel around the world results in more demand for met coal to help in production.
Investors should note that the recent developments in economic activities around the world have indicated signs for positive and possible turnaround of producers of raw materials used in steel production. In other words, there are signs for possible turnaround for ANR. Yet, it would require a lot of demand for met coal to help reverse the decline in prices which affected producers last year.
Analysts studying Alpha Natural Resources, Inc. (NYSE:ANR) have shown that the stock has much more price upside potential. The average price target for the stock shows about 20 – 25 percent potential upside. Note is better than what analysts predict for Cliff Natural Resources which operations in iron ore and coal markets.
There are hopes that new markets will help ANR and its peers in met coal production to reserve their poor-performance last year. Construction of new steel plants around the world like it has been indicated in markets such as Indonesia and India will also boost demand for metallurgical coal.
Company-specific factors
Alpha Natural Resources, Inc. (NYSE:ANR) has made some interesting progress that could enable it to make the most of any improvement in industry conditions. The company is driving its march to efficiency nicely and exploration of new opportunities is also unfolding well.
Conclusion
Alpha Natural Resources, Inc. (NYSE:ANR) can look up to the improvement in Europe and emerging markets to set stage for increased demand for met coal. Generally, ANR needs more positive factors helping the met coal market in order to offset the negative factors which have impacted prices. This way the company’s earnings will improve and so will the stock price.
