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Peabody Energy (BTU) (BTU)
:BTU
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Peabody Energy Comm
(NYSE:BTU)
72Outperform
Positive Factors
Acquisition and Expansion
The acquisition of Anglo's assets is expected to improve Peabody's portfolio, leading to better profitability and free cash flow generation over time.
Operational Performance
Peabody Energy reported 4Q adjusted EBITDA of $177M, beating the $168M consensus, driven by strong US thermal and seaborne thermal segment results.
Negative Factors
Cost Management
Costs across the board are higher than estimates, which is disappointing.
Peabody Energy Comm (BTU) vs. S&P 500 (SPY)
Market Cap
$1.68B
Dividend Yield2.33%
Average Volume (3M)4.11M
Price to Earnings (P/E)4.8
Beta (1Y)0.85
Revenue Growth-14.50%
EPS Growth-46.36%
CountryUS
Employees5,600
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.69
Shares Outstanding121,567,620
10 Day Avg. Volume4,988,677
30 Day Avg. Volume4,109,405
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.37
Price to Cash Flow (P/CF)3.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.50Price Target Upside84.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Peabody Energy Comm Business Overview & Revenue Model
Company DescriptionPeabody Energy Corp. engages in the business of coal mining. It operates through the following segments: Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Seaborne Metallurgical Mining, Seaborne Thermal Mining, and Corporate and Other. The Powder River Basin Mining segment consists of its mines in Wyoming. The Midwestern U.S. Mining segment includes Illinois and Indiana mining operations. The Western U.S. Mining segment reflects the aggregation of its New Mexico, Arizona, and Colorado mining operations. The Seaborne Metallurgical Mining segment covers mines in Queensland, Australia. The Seaborne Thermal Mining segment handles operations in New South Wales, Australia. The Corporate and Other segment includes selling and administrative expenses, results from equity affiliates, corporate hedging activities, and trading and brokerage activities. The company was founded by Francis S. Peabody in 1883 and is headquartered in St. Louis, MO.
How the Company Makes MoneyPeabody Energy Corporation generates revenue primarily through the extraction and sale of coal. The company's key revenue streams include the sale of thermal coal, which is used for power generation, and metallurgical coal, which is used in steel production. Peabody operates several mining operations in the Powder River Basin, Illinois Basin, and Appalachian regions in the U.S., as well as in New South Wales and Queensland, Australia. The company's revenue is influenced by coal prices, production volumes, and the demand from the electricity generation and steel manufacturing sectors. Significant partnerships with utility companies, industrial consumers, and international buyers also contribute to Peabody's earnings. Additionally, the company may engage in trading and brokerage activities related to its core products.
Peabody Energy Comm Financial Statement Overview
Summary
Peabody Energy demonstrates solid financial management with strong balance sheet health and effective cash flow handling. However, the declining revenue and profitability margins are areas of concern, reflecting challenges in maintaining growth momentum. The low debt levels and substantial equity provide a buffer against market fluctuations, but the company must address its declining top-line growth.Income Statement
The income statement reveals a mixed performance. The gross profit margin for TTM is approximately 11%, down from 31.6% in 2023. The net profit margin for TTM stands at 8.9%, a decrease from 15.4% in 2023. Revenue has decreased significantly from $4.95 billion in 2023 to $4.16 billion in TTM, indicating a negative growth rate. EBIT and EBITDA margins for TTM are lower compared to the previous year, showing reduced operational efficiency.78
Positive
Balance Sheet
The balance sheet reflects strong equity and low leverage. The debt-to-equity ratio is very low at 0.02, down from 0.11 in 2023, indicating minimal reliance on debt. The equity ratio is robust at 62.3%, showing strong shareholder equity in the asset base. Return on equity (ROE) for TTM is 10%, indicating reasonable profitability relative to equity.85
Very Positive
Cash Flow
Cash flow analysis indicates healthy cash generation. The free cash flow growth rate is 8.1% from 2023 to TTM, reflecting positive cash management. Operating cash flow to net income ratio is robust at 3.1, demonstrating strong cash conversion efficiency. The free cash flow to net income ratio is 2.0, indicating effective cash flow management against profitability.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.24B | 4.95B | 4.98B | 3.32B | 2.88B | Gross Profit |
| 815.80M | 1.56B | 1.69B | 765.20M | 356.20M | EBIT |
| 445.30M | 1.07B | 1.38B | 432.20M | -178.80M | EBITDA |
| 906.00M | 1.51B | 1.79B | 907.00M | -1.37B | Net Income Common Stockholders |
| 370.90M | 759.60M | 1.30B | 360.10M | -1.86B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 700.40M | 969.30M | 1.31B | 954.30M | 709.20M | Total Assets |
| 5.95B | 5.96B | 5.61B | 4.95B | 4.67B | Total Debt |
| 467.20M | 399.20M | 344.80M | 1.17B | 1.59B | Net Debt |
| -233.20M | -570.10M | -962.50M | 210.70M | 880.70M | Total Liabilities |
| 2.24B | 2.35B | 2.32B | 3.13B | 3.69B | Stockholders Equity |
| 3.65B | 3.55B | 3.23B | 1.76B | 929.60M |
| Cash Flow | Free Cash Flow | |||
| 204.00M | 687.20M | 949.40M | 236.90M | -207.20M | Operating Cash Flow |
| 606.50M | 1.04B | 1.17B | 420.00M | -9.70M | Investing Cash Flow |
| -598.10M | -342.60M | -28.70M | -131.50M | -206.70M | Financing Cash Flow |
| -276.00M | -460.30M | -681.60M | -43.40M | 193.40M |
Peabody Energy Comm Technical Analysis
Negative
13.81
Price Trends
17.02
Negative
20.79
Negative
21.90
Negative
Market Momentum
-1.28
Negative
39.97
Neutral
39.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BTU, the sentiment is Negative. The current price of 13.81 is below the 20-day moving average (MA) of 14.49, below the 50-day MA of 17.02, and below the 200-day MA of 21.90, indicating a bearish trend. The MACD of -1.28 indicates Negative momentum. The RSI at 39.97 is Neutral, neither overbought nor oversold. The STOCH value of 39.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BTU.
Peabody Energy Comm Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.19B | 8.95 | 19.34% | 11.29% | -4.60% | -42.35% | |
72 Outperform | $1.68B | 4.78 | 10.41% | 2.33% | -14.50% | -46.36% | |
70 Outperform | $3.87B | 7.01 | 19.67% | 0.70% | -13.20% | -51.56% | |
67 Neutral | $760.01M | 8.05 | 14.82% | 5.11% | -6.19% | 65.91% | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% | |
47 Neutral | $408.27M | ― | -6.98% | ― | -36.61% | -122.92% |
* Energy Sector Average
Performance Comparison
BTU
Peabody Energy Comm
13.81
-11.09
-44.54%
ARLP
Alliance Resource
24.79
7.25
41.33%
HNRG
Hallador Energy Company
9.58
1.81
23.29%
SXC
Suncoke Energy
9.28
-1.34
-12.62%
CNR
Core Natural Resources
76.41
-4.50
-5.56%
Peabody Energy Comm Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -22.81% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
Peabody Energy Corporation had a strong financial performance in 2024 with significant shareholder returns and strategic acquisitions. The company achieved record safety and environmental milestones and benefits from favorable US market tailwinds. However, challenges such as geological issues, a decline in China's steel consumption, new Chinese tariffs, and weather disruptions pose concerns.Highlights
Strong Financial Performance
Peabody Energy Corporation recorded a net income of $31 million in Q4 2024, contributing to a full-year net income of $371 million. The company also achieved an adjusted EBITDA of $872 million for the full year.
Significant Shareholder Returns
The company returned $221 million to shareholders in 2024 and has returned $600 million to shareholders since restarting its shareholder return program.
Record Safety and Environmental Achievements
Peabody set a new 140-plus year company record for the lowest accident rates, reclaimed 70% more land than disturbed, and freed up more than $100 million in reclamation bonding obligations.
Strategic Acquisition and Expansion
Peabody's acquisition of premium hard coking coal mines from Anglo American is progressing well, with expected synergies of $100 million a year post-acquisition. The Centurion mine shipped its first coal and is expected to produce 3.5 million tons in 2026.
US Coal Market Favorability
The US is experiencing strong policy and commercial tailwinds, including a 2% to 3% expected annual load growth and deferrals in retirement plans of coal units.
Lowlights
Geological Challenges Impacting Production
Geological challenges at the Twenty Mile mine required operational adjustments, impacting production.
China's Steel Consumption Decline
China's apparent steel consumption declined by approximately 5% in 2024, affecting met coal demand and leading to a 30% increase in steel exports.
Impact of Chinese Tariffs
China imposed a new 15% tariff on US coal imports, affecting Peabody's competitiveness in the Chinese market.
Weather-Related Disruptions
Monsoonal rains in Queensland affected coal stacking and reclaiming operations at Dalrymple Bay, causing temporary outages.
Company Guidance
In the Peabody Energy Corporation Q4 2024 earnings call, significant guidance metrics were shared, reflecting a strong finish to the fiscal year and outlining ambitious plans for 2025. The company recorded a net income attributable to common stockholders of $31 million, or $0.25 per diluted share, and an adjusted EBITDA of $177 million for Q4. For the full year, net income reached $371 million, with an adjusted EBITDA of $872 million. Peabody Energy generated $613 million in operating cash flow from continuing operations and returned $221 million to shareholders. The company set a record for the lowest accident rates in its history and increased land reclamation by 70%, freeing up over $100 million in bonding obligations. Looking ahead, Peabody anticipates significant growth, with plans to ship 0.5 million tons from the Centurion mine in 2025, scaling up to 3.5 million tons in 2026 with longwall production. The completion of the acquisition of premium hard coking coal mines from Anglo American is expected next quarter, which will position three-fourths of the company's EBITDA in metallurgical coal by 2026. This acquisition is projected to add 11.3 million tons of saleable production by 2026 and generate $100 million in annual synergies. Seaborne thermal and metallurgical coal volumes are projected to increase, with costs expected to remain consistent with 2024 levels. The company aims for capital expenditures of $450 million in 2025, with a focus on advancing the Centurion mine and completing the Anglo acquisition, which remains on track with regulatory approvals progressing well.Peabody Energy Comm Corporate Events
M&A TransactionsBusiness Operations and Strategy
Peabody Energy to Present at BMO Metals Conference
Positive
Feb 24, 2025
Peabody Energy Corporation announced its participation in the BMO Global Metals & Mining Conference starting February 24, 2025, where it plans to present its strategic focus and business developments. The company highlighted its transformation towards steelmaking coal to meet Asian demand, record safety and environmental performance in 2024, and strategic acquisitions, including Anglo American’s metallurgical coal portfolio, which are expected to enhance its market position and financial performance.
M&A TransactionsBusiness Operations and Strategy
Peabody Energy’s Major Acquisition of Anglo American Assets
Positive
Jan 14, 2025
On January 14, 2025, Peabody Energy’s CFO, Mark A. Spurbeck, will present an update on the company’s significant acquisition of Anglo American’s metallurgical coal assets in Australia, announced in November 2024. This acquisition, valued at $2.32 billion, is expected to transform Peabody into a leading met coal producer, providing substantial financial and strategic benefits, including cost synergies, enhanced shareholder value, and a doubling of EBITDA by 2026. The transaction is set to close in the second quarter of 2025, pending regulatory approvals and financing arrangements.
Executive/Board ChangesBusiness Operations and Strategy
Peabody Energy Extends Contract with COO Darren Yeates
Neutral
Dec 30, 2024
Peabody Energy’s subsidiary, Peabody Energy Australia Coal Pty Ltd, has updated the employment agreement with Darren R. Yeates, the Executive Vice President and COO, extending his contract until January 31, 2027. The agreement outlines possible changes to his responsibilities following the acquisition of Australian mines from Anglo American, and details compensation terms, including conditions for lump sum payments based on termination scenarios and change in control events.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.