Back to top

Image: Bigstock

Bear of the Day: Peabody Energy (BTU)

Read MoreHide Full Article

Today’s Bear of the Day is in a dying industry. You don’t have to take my word for it, rather, just look at earnings estimates coming from analysts all over Wall Street. As these analysts cut their earnings estimates, stocks drop down in their Zacks Rank. You can see the Zacks Rank on individual companies as well as the industry overall. We rank 256 industries using the Zacks Industry Rank. If you find a stock in a bottom industry that’s an unfavorable rank, you may want to tread lightly.

Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) Peabody Energy (BTU - Free Report) . Peabody Energy Corporation engages in coal mining business. The company operates through Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Seaborne Metallurgical Mining, Seaborne Thermal Mining, and Corporate and Other segments. It is involved in mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers.

The Coal industry ranks in the Bottom 9% of our Zacks Industry Rank. Peabody itself is a Zacks Rank #5 (Strong Sell). The reason for the negative ranks lies in recent earnings estimate revisions coming from analysts. To be fair, current quarter estimates have actually risen dramatically over the last ninety days. The current quarter Zacks Consensus Estimate has jumped from 25 cents to 45 cents. However, when you zoom out to the current year and next year, you see the reason for the unfavorable rank. Over the last sixty days, current year consensus has come down from $2.21 to $1.86. Next year’s number has dropped from $1.63 to $1.17. These consensus estimates would represent a drop of 40.95% in EPS for the current year and a subsequent drop of 37.3% for next year.

There is hope still for the Coal industry as several stocks are Zacks Rank #2 (Buy) stocks. If you’re looking for a good place to start your research on coal stocks, check out Zacks Rank #2 (Buy) Hallador Energy and SunCoke Energy (SXC - Free Report) .

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Peabody Energy Corporation (BTU) - free report >>

SunCoke Energy, Inc. (SXC) - free report >>

Hallador Energy Company (HNRG) - free report >>

Published in