FBR Says (ACI), (CLF), (ANR), (CLD), (BTU), (CNX) Should Jump on Nuclear Woes

We'll have to wait to see what effects the inevitable knee jerk reaction from politicians will have on the nuclear sector, but any slowdown there, which is a strong probability, will result in a boost in coal and steel, which should benefit companies like Consol Energy (NYSE:CNX), Arch Coal (NYSE:ACI), Cliffs Natural Resources (NYSE:CLF), Alpha Natural Resources (NYSE:ANR), Cloud Peak Energy (NYSE:CLD) and Peabody Energy (NYSE:BTU).

FBR said, “We note the recent pullback in coal stocks due to fears of China slowing and, then, potential temporary demand loss from Japan’s earthquake. With stocks now offering about 31% upside potential to our price targets, and valuation becoming attractive, we believe investors should start picking up quality names, such as Arch Coal (ACI), Cliffs Natural Resources (CLF), Alpha Natural Resources (ANR), Cloud Peak Energy (CLD), Peabody Energy (BTU), and Consol Energy (CNX). We are also becoming more constructive now on met names but look for the appropriate time, valuation, or catalyst to step into the names.”

“[I}n the mid to long term, we are confident that Japan will rebuild and upgrade all the houses, cars, and dilapidated infrastructure, which is positive for new steel demand and, thus, iron ore and met coal,” added FBR.

For coal, FBR believes it could rise from 4 percent to 5-6 percent a year over the next several years.