In a new report, Morgan Stanley analyst Evan Kurtz downgrades coal stocks Peabody Energy and Cloud Peak Energy and reduces the firm’s near-term earnings expectations for the coal industry. Despite the gloomy near-term outlook, Kurtz notes that patient value investors could be rewarded by a timely investment in coal.

Buying Opportunity

For investors that are willing to wait and weather years of volatility, Morgan Stanley sees a long-term value opportunity for buyers of CONSOL Energy Inc. CNX 0.95% and Foresight Energy LP FELP 1.98%.

“We see meaningful upside and attractive risk-reward for shares of CNX and FELP, on a new deck that is sufficiently conservative, in our view,” Kurtz explained.

Downgrades

Kurtz’s optimism does not extend…

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