WHC 1.56% $7.79 whitehaven coal limited

Target $18.72

  1. 955 Posts.
    lightbulb Created with Sketch. 655
    Following on from post 63554049

    Today's announcement seeks to increase buyback to 25% of SOI for the next 12 months, and the annual report states on page 3, "Targeting ~20%-50% NPAT payout ratio for distributions dividends and buy-backs combined. We may exceed 50% if the best use of surplus capital is to increase distributions (dividends and/or buy-backs)", buying back 25% within 12 months most definitely requires an increase in maximum NPAT payout ratio.

    I am confident that this warrants opening the new thread, since under broker SP we are at $9.13 right now. Below are some conservative calculations to justify the target price. This does not account for the shares that are remaining under the current buyback or the 25% that is likely to be bought back in the next 12-24 months pending shareholder approval. If this was also calculated, it would increase expected SP under same PE multiples mentioned, but we will stick with the bird that is in our hand today.

    We will use an average NEWC price for the full year of US$350 per ton as a conservative expectation for FY23 even though for the first QTR we have averaged well over US$400 per ton. AUD is currently trading 0.66 to the US dollar, will use 0.69 for fluctuations. Midpoint of cost guidance is $93/t, will use $94/t. Depreciation is also increased from the average of $250M over the last two years to $270M for future years.

    For FY22-23
    NEWC: US$350
    ROE (0.69): A$507
    DIscount to NEWC: 0%
    Less 8% Royalty: $466
    Less unit cost: $94/t
    Equals EBITDA margin: $372
    Times volume (14.5Mt - mid point of guidance)
    EBITDA: A$5.4B
    Less finance: $30M
    Less Depreciation: $270M
    PBT: A$5.1B
    Less 30% Tax: A$1.53B
    NPAT: A$3.57B
    Shares on Issue (excluding 32M milestone shares): 924M
    EPS on 924M shares: A$3.86
    $18.72 SP divided by EPS of A$3.86 = PE of 4.85

    If we were to average at US$300 per ton for the next year or even two, based on the same calculation method above we would be at a PE of 6 at a SP of $18.72. If average is US$250 per ton then it would be a PE of 7.8 at the same SP. All are very low and are well under the peak PE of 11 reached in 2018.
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Mkt cap ! $6.542B
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$7.68 $7.86 $7.66 $17.33M 2.227M

Buyers (Bids)

No. Vol. Price($)
20 10764 $7.79

Sellers (Offers)

Price($) Vol. No.
$7.80 17263 21
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Last trade - 15.41pm 27/05/2024 (20 minute delay) ?
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