Sluggish QLD hard coking coal prices back near US$115/t places upward pressure on net debt, putting CRN’s balance sheet back into focus. Balancing CRN’s compelling earnings/valuation leverage to healthier prices against balance sheet risk the longer those prices aren’t realised is looking increasingly tricky for investors. We now apply a 5% discount to our revised DCF valuation to derive our target, reflecting the risk of balance sheet strain in a downside coal price scenario. We move to a Hold, and think it’s prudent to trim overweight positions until the coal price/ balance sheet outlook becomes clearer. Our valuation adjusts for; 1) lower short term coal price assumptions; 2) removal of value for Curragh expansion/extension potential; and 3) removal of value for non-producing US assets. We see further downside risk to our CY21 QLD HCC price assumption. We now apply a 5% discount to our DCF valuation to derive our target, to reflect potential balance sheet strain in a downside coal price scenario.