Whitehaven Coal (WHC.AX)
Energy · ASX · Australia
Fundamentals
Valuation and ratings
Whitehaven Coal trades at A$7.43, close to the A$7.17 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 37 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 9.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Whitehaven Coal
Whitehaven Coal Limited develops and operates coal mines in Queensland and New South Wales. The company produces metallurgical and thermal coal. It operates mines, including open-cut and underground, located in the Gunnedah Coal Basin in New South Wales. The company sells coal in Japan, China, Korea, Taiwan, Malaysia, Vietnam, Indonesia, India, Europe, and internationally. Whitehaven Coal Limited was founded in 1999 and is based in Sydney, Australia.
WHC.AX passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Whitehaven Coal (WHC.AX) undervalued?
Against our discounted cash flow estimate of A$7.17, WHC.AX at A$7.43 is 3% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is WHC.AX's P/E ratio?
WHC.AX trades at 9.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.