More from Dividend.com
Referenced Stocks

Bank of America/Merrill Lynch Gets Bearish on Peabody Energy; Coal Supply is Outpacing Demand (BTU)

By Dividend.com,  September 24, 2012, 09:46:43 AM EDT

Coal producer Peabody Energy Corporation ( BTU ) on Monday received a big downgrade from analysts at Bank of America/Merrill Lynch.

The firm cut its rating on BTU by two notches, from "Buy" all the way down to "Underperform." Bank of America/Merrill Lynch also set a $22 price target on the stock, which suggests an 8% downside to the stock's Friday closing price of $24.03.

The analyst noted that metallurgical coal supply looks to be far outpacing market demand. This trend should lead to continued lower prices and thus weaker margins for coal giants like Peabody.

Peabody Energy shares fell 86 cents, or -3.7%, in premarket trading Monday.

The Bottom Line
Shares of Peabody Energy ( BTU ) have a 1.41% dividend yield, based on Friday's closing stock price of $24.03. The stock has technical support in the $20-$21 price area. If the shares can firm up, we see overhead resistance around the $26-$27 price levels.

Peabody Energy Corporation ( BTU ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: BTU



Latest News Video

Chandra Levy Murder Trial Judge Promises More Openness
Chandra Levy Murder Trial Judge Pro...
Cheetah Robot - a Model of Speed and Efficiency
Cheetah Robot - a Model of Speed an...


Sign-in
Existing NASDAQ.com member? Log in here.

By signing into to the site using any of the third-party services above, you agree to NASDAQ.com's Terms of Use.

From Our Trusted News Source





Most Active by Volume:

Company Last Sale Change Net / %
BAC $ 13.44 0.07  0.52%
F $ 14.95 0.10  0.66%
CLWR $ 3.40 0.14  4.29%
SIRI $ 3.515 0.02  0.43%
MSFT $ 34.85 0.23  0.66%
CSCO $ 24.01 0.07  0.27%
MRK $ 47.33 2.12  4.69%
PFE $ 28.78 0.08  0.28%