In a report released yesterday, Katja Jancic from BMO Capital maintained a Buy rating on Peabody Energy Comm (BTU – Research Report), with a price target of $26.00.
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Katja Jancic’s rating is based on several strategic factors that suggest a positive trajectory for Peabody Energy Comm. The company has shown a strong performance in its thermal coal operations, surpassing both the firm’s and consensus estimates for the fourth quarter of 2024. This outperformance is primarily driven by better-than-expected seaborne and US thermal operations, with shipments and margins exceeding expectations.
Looking forward, Peabody’s upcoming acquisition of Anglo’s metallurgical coal assets and the development of the Centurion mine are expected to enhance the company’s portfolio and profitability. While the current pricing environment is weak and costs are higher than anticipated, these strategic moves are expected to improve free cash flow generation and offer potential for re-rating. Therefore, despite some short-term challenges, the long-term outlook appears promising, justifying the Buy rating.
Jancic covers the Basic Materials sector, focusing on stocks such as Alcoa, Commercial Metals Company, and Algoma Steel Group. According to TipRanks, Jancic has an average return of 13.6% and a 65.00% success rate on recommended stocks.