real-time news and commentary for investors
Friday, Oct 18
Peabody Energy upgraded, Alpha Natural Resources cut at BMO
- Peabody Energy (BTU -0.5%) is upgraded to Outperform from Market Perform at BMO Capital, which sees attractive relative value for a sector leader with a diverse asset base; BTU beat Q3 earnings estimates and raised guidance.
- The firm likes BTU's slightly higher met coal outlook, good U.S. cost position in the Powder River and Illinois basins, and potential cost improvements in Australia.
- Meanwhile, BMO downgrades Alpha Natural Resources (ANR -2.7%) to Underperform from Market Perform, as ANR continues to face headwinds in Appalachia due to cheap natural gas pricing and increased environmental regulation.
- Global coal demand is rising, especially from China, and production costs are falling, but prices remain weak and U.S. environmental policy is heavily weighted against coal.