Coronado Global Resources, Inc. (ASX: CRN) 

Coronado Global Resources, Inc. (ASX: CRN) is an Australia-based international producer of metallurgical coal. It has operations in Australia and the United States. The Company’s coal post transforming in the steelmaking process supports the manufacture of everyday steel-based products – including steel needed for the manufacture of renewable energy infrastructure.

Recommendation Rationale - Sell at AUD 0.65

• Declining Realized Prices: There was a significant drop in realized prices for metallurgical coal. For instance, the realized Met coal price in Australia dropped 8.7% in Q4 FY24 from the previous quarter and 11.4% in FY24 year-over-year. Similarly, U.S. realized prices dropped 9.5% YoY in Q4 FY24 from the previous quarter and 18.7% in FY24 year-over-year. This drop in prices could indicate weaker market conditions or competitive pressure.
• Decline in U.S. Operations: S. operations saw a decrease in both ROM production (down 5.7% QoQ) and Saleable production (down 8.6% QoQ) in Q4 FY24, primarily due to a scheduled longwall move. Although this was expected, it still indicates a decline in productivity for the quarter.
• Leadership Transition: The resignation of the Group CFO and the appointment of a new CFO effective April 2025 might cause uncertainty, especially if the transition affects financial strategies or execution in the near term.
• Net Debt Position: While there was a slight reduction in net debt, the company still has a net debt position of US$85 million (FY24 end), which could be concerning if coal market conditions continue to weaken, affecting cash flow and financial flexibility.

Daily Price Chart

Daily Technical Chart, Data Source: REFINITIV

Considering the rally in share price movement, current trading level, and risks associated, the share price can witness resistance at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 0.65, as of 30 January 2025, at 11:55 AM AEDT.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 30 January 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.    

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.