Jefferies Reaffirms Buy on Arch Coal (ACI)

Jefferies is out with its report today on Arch Coal (NYSE: ACI), reaffirming Buy.

In a note to clients, Jefferies writes, "Improved CAPP margin realizations, good cost performance and attractive open contract tonnage for 2011-12 should drive value at Arch during the next 6-12 months. Arch's growing metallurgical coal exposure, increasing industrial electricity demand, more seasonal weather and prospects of higher thermal coal prices during 2011 should support Arch Coal shares in 2011. Our $43 price target reflects an EV/EBITDA multiple of 6.4x on our 2012 forecasted EBITDA of $1.35 billion; valuation within historical range."

Shares of ACI closed Friday at $33.22, up 1.75% from Thursday's close.