Brean Murray Carret Cuts Price Target on Peabody Energy (BTU), Believes Debt Will Be Manageable
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Price: $23.46 --0%
Rating Summary:
6 Buy, 11 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 5
Rating Summary:
6 Buy, 11 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 5
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Brean Murray Carret & Co. is reiterating its Buy rating on shares of Peabody Energy (NYSE: BTU) and is lowering its price target from $52 to $50 following plans to acquire 100 percent stake in MacArthur Coal.
The company announced that ArecelorMittal has decided not to acquire MacArthur Coal in a joint venture with Peabody. As a result, Peabody will now attempt to raise $3.2 billion in financing to purchase the entire stake of MacArthur Coal, in addition to the $1.5 billion in cash the company already planed on using.
The firm notes the acquisition will increase the company's leverage greatly over the near term and forecasts that the deal will be accretive to 2012 earnings by $0.20.
An analyst at Brean Murray Carret comments, "We do believe that the new debt load of $3.2 billion will be manageable for Peabody. This is a large amount of new debt, but it is not so much that we think Peabody could not shoulder it."
The company did release its third quarter results inline with expectations as earnings were $0.91 per share. Management also reaffirmed its FY11 guidance. The firm anticipates that shares will continue to rise on the news today.
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 $39.66 yesterday.
The company announced that ArecelorMittal has decided not to acquire MacArthur Coal in a joint venture with Peabody. As a result, Peabody will now attempt to raise $3.2 billion in financing to purchase the entire stake of MacArthur Coal, in addition to the $1.5 billion in cash the company already planed on using.
The firm notes the acquisition will increase the company's leverage greatly over the near term and forecasts that the deal will be accretive to 2012 earnings by $0.20.
An analyst at Brean Murray Carret comments, "We do believe that the new debt load of $3.2 billion will be manageable for Peabody. This is a large amount of new debt, but it is not so much that we think Peabody could not shoulder it."
The company did release its third quarter results inline with expectations as earnings were $0.91 per share. Management also reaffirmed its FY11 guidance. The firm anticipates that shares will continue to rise on the news today.
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 $39.66 yesterday.
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