Sumary of Morgan Stanley: don’t miss this with the Whitehaven (ASX:WHC) share price:
- In a period of 2 weeks, coal prices fell at a rapid pace from a 12-month high of US$269.50/tonne in October to US$140.90/tonne by November amid production curbs in China.
- Whitehaven’s share price fell 40% amid the sinking coal price from October to November, which also fell 48% in around the same time.
- GC Newcastle coal futures have recovered slightly towards US$160/tonne as we approach December, which might have saved Whitehaven’s share price somewhat.
- This disconnect in Whitehaven’s valuation and its rapidly declining debt figure is under-appreciated by the market and could be a positive catalyst, the broker says.