Nomura Securities Maintains a 'Neutral' on Peabody Energy (BTU); Highlights From Investor Day
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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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Nomura Securities maintains a 'Neutral' on Peabody Energy (NYSE: BTU) price target of $38.00.
Analyst, Curt Woodworth's Investor Day Highlights: 1) Strong Growth Potential - While the U.S. market continues to be weak, with demand projected to decline 100-120mt, BTU noted that PRB coal was close to being back in the money with gas prices near $2.75/MMBtu. At $3.00/MMBtu gas, BTU estimated at least 40mt of PRB volume would switch back in 2013. BTU also kept volume guidance unchanged for the Australia assets in 2012, a key positive in our view. 2) MCC execution on track and accretion target reaffirmed for 2013. 3) China to remain a key growth driver. We remain Neutral on BTU; however, the current valuation suggests limited downside, in our view, trading at 5.9x 2012E EV/EBITDA (relative to sector at 6.2x). We believe low operating risk and much higher long-term volume growth potential warrant a premium multiple.
For an analyst ratings summary and ratings history on Peabody Energy click here. For more ratings news on Peabody Energy click here.
Shares of Peabody Energy closed at $22.27 yesterday.
Analyst, Curt Woodworth's Investor Day Highlights: 1) Strong Growth Potential - While the U.S. market continues to be weak, with demand projected to decline 100-120mt, BTU noted that PRB coal was close to being back in the money with gas prices near $2.75/MMBtu. At $3.00/MMBtu gas, BTU estimated at least 40mt of PRB volume would switch back in 2013. BTU also kept volume guidance unchanged for the Australia assets in 2012, a key positive in our view. 2) MCC execution on track and accretion target reaffirmed for 2013. 3) China to remain a key growth driver. We remain Neutral on BTU; however, the current valuation suggests limited downside, in our view, trading at 5.9x 2012E EV/EBITDA (relative to sector at 6.2x). We believe low operating risk and much higher long-term volume growth potential warrant a premium multiple.
For an analyst ratings summary and ratings history on Peabody Energy click here. For more ratings news on Peabody Energy click here.
Shares of Peabody Energy closed at $22.27 yesterday.
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