UPDATE: Davenport Upgrades Walter Energy to Buy on Met Coal Strength

Davenport raised its rating on Walter Energy (NYSE: WLT) from Neutral to Buy and established a $42 price target.

Davenport noted, "The upgrade is based on our view that WLT's valuation multiple will peak in 2013, driven by a recovery in met coal prices. We expect a rebound in met prices will drive improved investor sentiment towards WLT. This should propel its multiple to peak levels as investors anticipate higher met prices driving significant earnings growth in 2014."

Walter Energy closed at $36.34 on Monday.