In a report released yesterday, Katja Jancic from BMO Capital assigned a Hold rating on Peabody Energy Comm (BTU – Research Report), with a price target of $25.00.
Katja Jancic has given her Hold rating for Peabody Energy Comm due to a combination of factors. Peabody’s 3Q’23 adjusted EBITDA surpassed both Jancic’s and the FactSet consensus estimates, primarily owing to lower met coal segment costs and improved PRB volumes/margins. Furthermore, the 4Q’23 outlook for the company is slightly better than anticipated. Peabody also successfully recommenced operations at North Goonyella, while demonstrating impressive cost execution and an overall promising near-term outlook.
Nevertheless, Jancic’s rating is influenced by certain reservations. Despite Peabody’s solid cash flow generation and plan to return at least 65% of available FCF to shareholders through special dividends or buybacks, there are still concerns. The company’s significant exposure to the thermal coal market, which is currently experiencing a secular decline, is a significant concern. These factors combined have led Jancic to adopt a cautious stance and maintain a Hold rating on Peabody Energy Comm’s stock.
BTU’s price has also changed slightly for the past six months – from $23.410 to $23.750, which is a 1.45% increase.
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Peabody Energy Comm (BTU) Company Description:
Peabody Energy Corp. engages in the business of coal mining. It operates through the following segments: Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Seaborne Metallurgical Mining, Seaborne Thermal Mining, and Corporate and Other. The Powder River Basin Mining segment consists of its mines in Wyoming. The Midwestern U.S. Mining segment includes Illinois and Indiana mining operations. The Western U.S. Mining segment reflects the aggregation of its New Mexico, Arizona, and Colorado mining operations. The Seaborne Metallurgical Mining segment covers mines in Queensland, Australia. The Seaborne Thermal Mining segment handles operations in New South Wales, Australia. The Corporate and Other segment includes selling and administrative expenses, results from equity affiliates, corporate hedging activities, and trading and brokerage activities. The company was founded by Francis S. Peabody in 1883 and is headquartered in St. Louis, MO.
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