BMO Capital Markets reported on Monday that it has downgraded coal company, Peabody Energy Corporation (BTU).
The firm has lowered its rating on BTU from “Outperform” to “Market Perform,” and has reduced the company’s price target from $30 to $22. This price target suggests that the stock remain flat at its current price of $21.76.
An analyst from the firm commented, “BMO Research expects a rebound in met coal pricing, which would potentially benefit Peabody, but the company faces a near-term headwind given relatively high financial leverage and falling margins. Historically, Peabody has traded above the group due to the size and quality of its asset base, geographic diversity (i.e., exposure to Australia), and strong management team. BMO Research expects that premium to persist; however, the current valuation appears to adequately reflect that premium.”
Peabody Energy shares were down 24 cents, or -1.09% during premarket trading Monday. The stock has declined -29.5% in the past year.
The Bottom Line
Shares of Peabody Energy Corporation (BTU) have a 1.55% yield, based on Friday’s closing price of $22.00
Peabody Energy Corporation (BTU) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.