Mon, Jan. 26, 3:46 PM
- Peabody Energy (BTU +4.6%) is upgraded to In-line from Underperform with a $6.50 price target, raised from $6, at Imperial Capital, seeing BTU's free cash flow profile to equity improving over time as hedges roll off.
- The firm remains concerned about the impact of a dividend cut, coal headlines, and $3 natural gas in the U.S., but also says it is aware of a number of bullish factors for nat gas in H2 2015, including export demands that could improve.
Fri, Jan. 23, 12:53 PM
- Peabody Energy (BTU -5.6%) is downgraded to Negative from Stable at Standard & Poor's, based on the rating agency's view that metallurgical coal prices will remain depressed for at least another year.
- In light of updated price assumptions, the firm believes it is less likely that BTU can improve its credit measures to fall in line with the current aggressive financial risk profile assessment within the next 12 months.
- S&P reaffirms its BB- corporate credit rating on the company.
Thu, Jan. 22, 10:17 AM
- Peabody Energy (BTU -1.9%) says President/COO Glenn Kellow has been named President and CEO-Elect and will become CEO effective May 4.
- Kellow joined BTU in 2013 after a 28-year career with BHP Billiton, where he ultimately served as president of the multinational aluminum and nickel business with operations in South Africa, Australia, Mozambique and Colombia.
- Current Chairman and CEO Gregory Boyce will remain as Executive Chairman.
Wed, Jan. 14, 12:39 PM
- Citi cuts price targets for iron ore to $58 for 2015 and $62 for 2016, down from its prior estimates of $65 for both years, and lowers its outlook for thermal and met coal.
- Citi warns its downwardly revised forecast means it now expects earnings for major mining companies will fall by 9%-21% for 2015 and by 3%-16% in 2016.
- Rio Tinto (RIO -2.5%) is the exception, as Citi sees earnings rising 7.1% this year and 10.6% next year due to the company’s greater exposure to the weaker Australian dollar.
- The firm cuts its price target for Glencore (OTCPK:GLCNF -7.2%) by 8% to £3.60 from £3.90 and sees earnings falling 21% and 16% respectively in 2015 and 2016.
- Citi says it is still bullish on the sector, but warns that metals and mining companies will only slowly grind higher over the next few years.
- Also: BHP -4.5%, VALE -5%, FCX -12%, SCCO -4.9%, TCK -9.7%, CLF -4.4%, CENX -9.1%, MT -4.2%, X -4.9%, NUE -3.4%, STLD -2.6%, BTU -9.8%, ANR -8.8%, ACI -8.9%.
Tue, Jan. 13, 7:14 PM
- The Obama administration reportedly plans to require the oil and gas industry to cut methane emissions by as much as 45% over the next decade, with the EPA expected to issue proposed regulations this summer and final regulations by 2016.
- The proposal would be a victory for environmental groups that have lobbied the administration to force the oil and gas industry to cut emissions of methane, a powerful greenhouse gas tied to climate change.
- Potentially related tickers include KOL, BTU, WLT, CNX, ACI, ANR, YZC, ARLP, AHGP, NRP, PVG, PVA, OXF, CLD, WLB.
Thu, Jan. 8, 2:33 PM
- It’s time for investors to start looking for entry points in quality coal miners such as Consol Energy (CNX +1.5%), Cloud Peak Energy (CLD +4.1%) and Peabody Energy (BTU -0.2%), J.P. Morgan says in the hope that funding problems now confronting the U.S. shale revolution will lead to a more balanced U.S. gas market and better prospects for coal.
- While the seaborne market is lackluster, JPM believes it sees a positive story emerging for the U.S. coal industry due to the changing landscape in U.S. E&P driven by falling oil prices, which should lead to a tighter natural gas market in late 2015 and beyond and spark positive movement in depressed coal names.
Wed, Jan. 7, 7:35 PM
- Energy bonds have become one of the riskiest sectors in the bond market, as the cost of buying five-year credit default swaps protecting $10M of bonds has jumped from $139K/year last June to $377K today for companies in the S&P/ISDA CDS U.S. Energy Select 10 Index.
- The index consists of 10 large major energy companies: APC, APA, CHK, COP, DVN, OTCQB:FSTO, HAL, BTU, VLO and WMB.
- Even though most of the companies boast investment-grade ratings, it now costs more to insure bonds in that index against default than it costs to insure bonds of an average junk-rated company, according to S&P.
Dec. 29, 2014, 10:26 AM
- Pummeled this year thanks to slumping coal prices, a general rout in commodities names, and (in some cases) bankruptcy fears, coal stocks are seeing bargain-hunters emerge on a quiet late-December trading day.
- Gainers: CLF +8.2%. WLT +4.6%. ACI +3.3%. BTU +2.1%. ANR +3.8%.
- On SA, Equity Watch recently argued more pain is in store for the U.S. coal industry 2015, given the April implementation of MATS regulations, declining thermal coal demand (due to the retiring of coal-fired plants), and an unfavorable global supply/demand balance for metallurgical coal. The author does, however, think rising Asian demand could provide some relief for U.S. firms.
- ETF: KOL
Dec. 19, 2014, 2:27 PM
- U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia, according to a new proposal from the Interior Department.
- The reforms would update rules on how energy companies settle their royalty payments on coal, oil and gas pulled from federal lands, but the changes to the coal program may have the biggest impact.
- Arch Coal (ACI +8.2%), Peabody Energy (BTU +4.2%) and Cloud Peak Energy (CLD +1.7%) are among the leaders in mining coal from federal land in the U.S. west.
Dec. 18, 2014, 12:35 PM
- Peabody Energy (BTU +0.6%) is one of two remaining bidders for a contract to develop the Tavan Tolgoi coking coal deposit in Mongolia, which holds 7.4B tons of the coal used to make steel.
- Development of the mine has stalled since a botched tender in 2011 that saw the Mongolian government rescind an agreement that would have allowed BTU, China Shenhua and OAO Russian Railways to operate the mine.
- A unit of Mongolia Mining (OTCPK:MOGLF), which already mines coal at another site in the Tavan Tolgoi coal basin, leads a group making the other bid.
Dec. 15, 2014, 6:33 PM
- Calpers and Calstrs, the two biggest pension funds in the U.S., would be required to divest its holdings in companies that produce coal under a bill to be introduced by Kevin de Leon, the new leader of the state Senate.
- Calpers, with assets of $294B, had nearly $46M in coal and consumable fuels holdings as of Sept. 30, with its largest holdings in Consol Energy (NYSE:CNX), Peabody Energy (NYSE:BTU) and Alliance Resources Partners (NASDAQ:ARLP), according to Bloomberg data.
- The measure, if passed by lawmakers and signed into law by Gov. Brown, would make Calpers the largest pension to end investment in coal.
Dec. 11, 2014, 3:36 PM
- J.P. Morgan analysts think sliding oil prices could be good news for coal miners such as Arch Coal (NYSE:ACI) and Peabody Energy (NYSE:BTU), as the current problems in the E&P world appear to signal an inflection point for the shale oil and gas business, which has been a major thorn in coal’s side.
- Gas supply should turn lower in 2016, JPM says, resulting in higher coal prices and a realization that coal must have a bigger role in U.S. power supply than was expected just a few weeks ago.
- The firm likes the high yielding Illinois basin MLPs Foresight Energy (NYSE:FELP) and Alliance Resource Partners (NASDAQ:ARLP), but for more aggressive investors it thinks the other coal names with financial strength like Cloud Peak Energy (NYSE:CLD), Consol Energy (NYSE:CNX), and BTU should benefit more from the new paradigm by H2 2015.
Dec. 3, 2014, 12:35 PM
- Mongolia has restarted bidding for development of the giant Tavan Tolgoi coal project as it tries to boost a flagging economy hit by falling commodity prices and a decline in foreign investment.
- A consortium comprising China Shenhua Energy (OTCPK:CUAEF), the world's largest coal producer by volume, Sumitomo Corp. and a subsidiary of Mongolian Mining (OTCPK:MOGLF) has submitted a bid; Peabody Energy (NYSE:BTU) and a local Mongolia mining firm also submitted separate bids
- Tavan Tolgoi holds ~7.5B metric tons of coking coal, but Mongolia's cash-strapped government has struggled to finance its development.
Dec. 2, 2014, 3:35 PM
- Walter Energy (WLT -29.2%) sells off nearly 30% following a note from BB&T Capital predicting the coal company would fall into bankruptcy in 2015.
- BB&T thinks WLT has enough cash to get through 2015 at the current met coal price of $119/metric ton, but believes WLT's board "will reach the conclusion before that point that the met market won't improve enough over the next couple of years to save the company from needing to restructure."
- Most other coal names also are lower: ANR -2.3%, ACI -1.9%, CLD -3.1%, CLF -2.2%, CNX -0.7%, BTU +0.6%.
Nov. 28, 2014, 10:25 AM
- OPEC's Thursday decision to keep oil production unchanged has sparked a commodity stock rout, one that hasn't left coal stocks unscathed.
- Major decliners: BTU -6%. ACI -6.6%. ANR -6.2%. CLD -4.3%. CNX -2.8%. NRP -3.5%. ARLP -3%. CLF -3.6%.
- Thermal coal prices have already fallen sharply this year.
- ETF: KOL
Nov. 25, 2014, 7:57 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Peabody Energy (NYSE:BTU) form a joint venture to develop an open-cut coal mine between existing operations run by the two companies in Australia's New South Wales state.
- The 50-50 JV will dig the pit between Glencore's United coal mine in the Hunter Valley and BTU's Wambo operations nearby; the project is expected to start in mid-2017 and could produce 6M metric tons/year of thermal coal used in power stations.
- The plan, expected to take effect in mid-2017, would improve recovery of coal from the combined operations and sharply cut capital and operating costs.
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