FBR Capital Reiterates an 'Outperform' on Peabody Energy (BTU); Solid Quarter; Conservative Guidance and Positive Catalysts Coming
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Price: $25.48 +5.77%
Rating Summary:
7 Buy, 12 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
7 Buy, 12 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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FBR Capital reiterates an 'Outperform' on Peabody Energy (NYSE: BTU), lowers PT from $77 to $75.
FBR analyst says, "While BTU did not provide any assumption on met coal pricing for unpriced tons, we estimate the implied 2H11 met coal benchmark assumption calculates to ~$237/ton, which is conservative. More importantly, BTU maintained its volume guidance with higher met volumes than our expectations. This morning, we slightly adjust our estimates but remain at the top end of the guidance range and believe BTU will walk up guidance in coming quarters as pricing clarity emerges. There are multiple positive catalysts to improve valuation and close the 8% relative underperformance to peers and 11%, versus the broader market during the last four weeks. We would use any volatility from macro concerns to build positions in this blue-chip company. Furthermore, BTU has a solid balance sheet (net debt/equity of 30%) and ample liquidity (~$1.4B in cash equivalents) to pursue organic and M&A growth opportunities."
For more ratings news on Peabody Energy click here and for the rating history of Peabody Energy click here.
Shares of Peabody Energy closed at $63.67 yesterday.
FBR analyst says, "While BTU did not provide any assumption on met coal pricing for unpriced tons, we estimate the implied 2H11 met coal benchmark assumption calculates to ~$237/ton, which is conservative. More importantly, BTU maintained its volume guidance with higher met volumes than our expectations. This morning, we slightly adjust our estimates but remain at the top end of the guidance range and believe BTU will walk up guidance in coming quarters as pricing clarity emerges. There are multiple positive catalysts to improve valuation and close the 8% relative underperformance to peers and 11%, versus the broader market during the last four weeks. We would use any volatility from macro concerns to build positions in this blue-chip company. Furthermore, BTU has a solid balance sheet (net debt/equity of 30%) and ample liquidity (~$1.4B in cash equivalents) to pursue organic and M&A growth opportunities."
For more ratings news on Peabody Energy click here and for the rating history of Peabody Energy click here.
Shares of Peabody Energy closed at $63.67 yesterday.
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