Morgans suggests the valuation for Australia's fourth largest Australian met coal producer, Stanmore Resources, is far too cheap. It's thought the current share price represents a buying opportunity.

The analyst believes the low valuation is due to a discount for acquisition risk (Daunia) and macroeconomic risks affecting steel/hard coking coal market sentiment.

Morgans feels Stanmore will likely bid assertively for BHP group's ((BHP)) Daunia coal mine.

The Add rating is maintained and the target falls to $4.75 from $4.80.

Sector: Energy.

Target price is $4.75.Current Price is $2.98. Difference: $1.77 - (brackets indicate current price is over target). If SMR meets the Morgans target it will return approximately 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2023 Acquisdata Pty Ltd., source FN Arena