Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
So what: Along with the downgrade, analyst Peter Ward lowered his price target for Arch Coal to $4.75 (from $8) and for Alpha Natural to $4.50 (from $7.50), suggesting that he sees little to no upside in either stock going forward. So while contrarians might be attracted to the sector's slump over the past year, Ward's call might reflect a strengthening sense on Wall Street that coal prices aren't about to turn anytime soon.
Now what: Jefferies lowered its 2014 EPS estimate for Arch from ($0.60) to ($0.80) and for Alpha Natural from ($1.75) to ($1.85). "In short, sluggish met coal prices and the threat of another bust in gas prices are too much for us to continue recommending the higher levered names of Arch and Alpha," Ward said in a note to investors. Of course, with Arch and Alpha Natural shares down more than 20% and 40%, respectively, from their 52-week highs, much of that bearishness might already be baked in.
Three stock picks to ride America's energy bonanza
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.