Westshore Terminals Surges After RBC Upgrade Amid Grassy Mountain Approval

Westshore Terminals shares rose 15.7% on Tuesday after RBC Capital upgraded the company to Outperform from Sector Perform with a C$30 price target, raised from C$23. The upgrade comes after the Alberta Energy Regulator approved the Grassy Mountain coal mine project, a key catalyst for Westshore. The approval is expected to increase demand for the company's coal terminal services.

Westshore Terminals shares (OTCPK: WTSHF) rose 15.7% on Tuesday following a significant upgrade from RBC Capital. The upgrade moved the company from Sector Perform to Outperform with a new price target of C$30, up from C$23 [1].

The catalyst behind the upgrade was the Alberta Energy Regulator's unexpected approval of the Grassy Mountain coal project last week. While the approval restarts the project's approval process and does not guarantee its completion, RBC Capital's Walter Spacklin believes the project has the potential to materially re-rate Westshore shares if approved. The Grassy Mountain project is expected to contribute 4.5 million tons of throughput, which aligns with Westshore's nameplate capacity of 35 million tons [1].

Spacklin sees the Grassy Mountain project as a key driver for Westshore's long-term growth, particularly due to the favorable outlook for met coal compared to thermal coal. The approval of the project is expected to increase demand for Westshore's coal terminal services, which could lead to a significant boost in the company's revenue and earnings.

Despite the positive outlook, Spacklin acknowledges that the project's approval is not guaranteed. However, he remains optimistic about Westshore's strong underlying free cash flow and no debt position, which he believes will protect investors from potential downside risks.

References:

[1] https://seekingalpha.com/news/4450622-westshore-terminals-raised-at-rbc-with-grassy-mountain-a-key-catalyst