BMO Capital upgraded Peabody Energy (BTU) to Outperform from Market Perform with an unchanged price target of $26. Peabody’s product portfolio/mix is set to improve following the acquisition of Anglo’s metallurgical coal assets and ramp-up of the Centurion mine, which should translate to better profitability over time and offer a further re-rate potential for the shares, the analyst tells investors in a research note. BMO recognizes there is execution risk but with the stock down over 20% since the acquisition announcement, it views the risk/reward as positive.
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