On Friday analysts at Bank of America Merrill Lynch reaffirmed
its rating on Peabody Energy Corporation (
) while also cutting its price target for the coal company.
The analysts give BTU an "Underperform" rating and lowered the
price target from $22 to $20. The new price target is a -27.7%
downside from Friday's closing price of $27.68.
An Bank of America Merrill Lynch analyst noted, "Our 2013E EPS
falls sharply to reflect guidance of higher-than-expected costs at
its Australian coal ops and lower volumes overall. We now model
2013 EPS of $0.60 from $1.30 and 2014 at $1.75 from $2.50. BTU said
in a release 2013 Australian costs would rise 5% y/y, with Q1 up
10% from ytd levels, U.S. thermal volumes were seen down 8-12M tons
y/y to 180-190M tons, and Australian volumes were guided up 2-3M
tons y/y to 33-36M tons. BTU expected Q1 would be trough earnings
for 2013 on the view that met prices recover and costs ease."
Peabody Energy shares were up 20 cents, or +0.72%, in premarket
trading on Monday.
The Bottom Line
Shares of Peabody Energy (
) have a 1.23% dividend yield, based on Friday's closing stock
price of $27.68. The stock has technical support in the $22-$25
price area. If the shares can firm up, we see overhead resistance
around the $29-$30 price levels.
Peabody Energy Corporation (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.0 out of 5 stars.
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, as well as a detailed explanation of
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