Zacks Analyst Interview Highlights: Arch Coal, Consol and Peabody Energy

Zacks.com releases the latest Analyst Interview. Todays interview is with senior analyst Matthew Thurmond, who discusses Arch Coal (NYSE: ACI), Consol (NYSE: CNX) and Peabody Energy (NYSE: BTU).

A synopsis of todays Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Do you see coal prices increasing to previous highs anytime soon?

Current indicators are neutral. As one of my miners mentioned in its recent earnings call, coal demand is up slightly year-to-date while supply is down. This is obviously bullish. However, there is clearly excess capacity out there that could push additional supply on the market if prices continue to climb. Several miners had previously delayed projects or taken capacity offline due to lower prices earlier this year.

For example, Arch Coal (NYSE: ACI) previously dropped its 2007 production guidance from 140 million tons to just over 130 million. Consol (NYSE: CNX) refused to increase production unless the market clearly demanded it. Peabody Energy (NYSE: BTU) the worlds largest coal miner, decided to delay its massive School Creek mine project. Earlier this year it announced that it would now put it off until at least 2009. So miners out there have additional supply sources that can be brought online. This additional supply will curb the impact that any marginal near-term demand might have on pricing. Another worry in the near-term, as mentioned above, is potential carbon-cap legislation. Looking ahead, we are neutral on coal pricing through the first half of 2008.

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The performance of the Zacks Rank portfolios shown above for annual and year-to-date periods are the linked monthly total returns (price changes + dividends) of equal weighted hypothetical portfolios, consisting of those stocks with the indicated Zacks Rank, assuming monthly rebalancing and zero transaction costs. These are not the returns of actual portfolios. The hypothetical portfolios were created at the beginning of each month from Jan 1988 forward based on the values of the Zacks Rank available to Zacks' clients before the beginning of each month. The portfolios created monthly from 1988 through September 2006 exclude ADRs and are comprised of stocks that have the indicated Zacks Rank and were covered by at least two analysts at the time of the stocks inclusion in the portfolio. Starting in October 2006 and going forward, the portfolios are comprised of all stocks with the indicated Zacks Rank and do not exclude ADRs, which is more reflective of the list of stocks that customers will find on the Zacks web sites. 2007 returns are for the period of Jan 1 Jun 30, 2007. These performance numbers have been audited from 1995 through 2003 by Autschuler Melovan, a division of American Express Financial.

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