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Pro Analysis

Buy Arch Coal on deregulation under Trump, potential dividend, Jefferies says

A tractor-trailer navigates mounds of coal after delivering a truckload of coal to Arch Coal Terminals in Catlettsburg, Kentucky.
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A tractor-trailer navigates mounds of coal after delivering a truckload of coal to Arch Coal Terminals in Catlettsburg, Kentucky.

Jefferies initiated coverage of Arch Coal with a buy rating due to an improving political environment for coal under the President Donald Trump administration.

"The Trump presidency is a clear positive for the US coal industry as the Obama Administration seemed determine to squeeze the industry out of existence. We expect the Trump team to pursue a regulatory agenda that favors use of domestic coal," analyst Christopher LaFemina wrote in a note to clients Friday. "Arch Coal should generate strong free cash flow which it is ultimately likely to use to fund a dividend."