Goldman Lowers Price Target on Peabody Energy (BTU), Sees Collaspe as Minor Bump in The Road
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Price: $27.61 +2.79%
Rating Summary:
7 Buy, 12 Hold, 7 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
7 Buy, 12 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Goldman Sachs is maintaining its Buy rating on shares of Peabody Energy (NYSE: BTU) while lowering its price target from $70 to $67.
The company announced that a roof has caved in at its North Goonyella mine in Australia has blocked the mine’s main entrance. Management stated that production may not resume until October which would result in a loss of up to 500 thousand tons of its highest benchmark quality met coal.
BTU plans on fixing the problem with a wall of concrete and does not anticipate any long term impact or problems on production. Peabody cut its third quarter and full-year 2011 EBITDA guidance by $125 million and $175 million due to the loss in volumes and cost of repairs.
The firm continues to believe that Peabody is strong company and notes that any sell-off on this news creates an attractive entry point.
As a result, Goldman is reducing its 2011 EPS estimate from $4.52 to $4.05.
An analyst at Goldman comments, "Assuming there is no impact to the Goonyella mine beyond October, Peabody’s leading longterm earnings power/returns and organic growth rate are still intact. The incident reminds us unforeseen challenges arise often in mining and highlights the benefits of diversification."
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 $47.64 yesterday.
The company announced that a roof has caved in at its North Goonyella mine in Australia has blocked the mine’s main entrance. Management stated that production may not resume until October which would result in a loss of up to 500 thousand tons of its highest benchmark quality met coal.
BTU plans on fixing the problem with a wall of concrete and does not anticipate any long term impact or problems on production. Peabody cut its third quarter and full-year 2011 EBITDA guidance by $125 million and $175 million due to the loss in volumes and cost of repairs.
The firm continues to believe that Peabody is strong company and notes that any sell-off on this news creates an attractive entry point.
As a result, Goldman is reducing its 2011 EPS estimate from $4.52 to $4.05.
An analyst at Goldman comments, "Assuming there is no impact to the Goonyella mine beyond October, Peabody’s leading longterm earnings power/returns and organic growth rate are still intact. The incident reminds us unforeseen challenges arise often in mining and highlights the benefits of diversification."
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 $47.64 yesterday.
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