Why Most Analysts Rate Peabody Energy a ‘Buy’



Analyst ratings

According to the latest data compiled by Thomson Reuters, of the eight analysts covering Peabody Energy (BTU), six (or 75.0%) have given the company a “buy” rating, and two (or 25.0%) have given it a “hold.” There were no “strong sell” or “sell” ratings.

As of October 12, 2017, Peabody Energy’s consensus 12-month target price was $35.83, which reflects an upside potential of nearly 20.0% based on its market price of $28.63.

If notable Wall Street analysts alter their ratings of a company’s stock, a significant short-term shift in the stock price can occur. So it’s important to keep track of analysts’ ratings.

Wall Street analysts expect Peabody Energy to report EPS (earning per share) of $1.18 for 3Q17 compared to $0.99 in 2Q17 and LPS (loss per share) of $3.68 in 3Q16.

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Peabody Energy’s consensus

For 3Q17, analysts expect Peabody Energy (BTU) to report higher revenue figures. Also, analysts estimate that the company will report net profits in 3Q17. They also anticipate higher EBITDA (earnings before interest, tax, depreciation, and amortization) than in 2Q17.

About 75.0% of analysts are recommending a “buy” for Peabody Energy. The rating was primarily due to its exit from bankruptcy through a successful reorganization plan and positive earnings estimates. Among the major coal (KOL) mining companies, Arch Coal (ARCH) has also recently emerged from bankruptcy. Walter Energy (WLTGQ) and Alpha Natural Resources (ANRZQ) are other coal companies that have filed for bankruptcy.

Notable ratings 

Macquarie started coverage on Peabody Energy stock on September 7, 2017, giving the stock a price target of $30 and a “neutral” rating. Seaport Global upgraded its rating for BTU to “buy” from “neutral” on April 24, 2017, with a $31 target price.

Next, let’s look at analysts’ revenue estimates for Peabody and see whether those expectations are conservative or optimistic.


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