JPMorgan Cuts Peabody Energy (BTU) and Arch Coal (ACI) to Underweight

(Updated - October 13, 2015 10:58 AM EDT)

JPMorgan downgraded Peabody Energy (NYSE: BTU) and Arch Coal Inc (NYSE: ACI) from Neutral to Underweight. Analyst John Bridges thinks growing shale gas supplies will keep gas prices down again next year, capping the upside for coal
prices.

"We remain convinced that a diverse energy supply to the power grid is important, and decision makers understand this but we expect 2015/16 to remain difficult for the equities as they go though the sausage machine of re-organization," said Bridges.

"We continue to remain cautious as we think about the outlook for next year. The natural gas market remains oversupplied; the utility coal stockpiles are building and the strong US$ is hurting coal exports. Currencies aren’t helping much by delaying the required supply response. Consequently, we are downgrading BTU and Arch from Neutral to UW," added the analyst.

For an analyst ratings summary and ratings history on Arch Coal Inc click here. For more ratings news on Arch Coal Inc click here.

Shares of Arch Coal Inc closed at $4.09 yesterday.

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