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Peabody Energy (BTU) Soars 15.4%: Is Further Upside Left in the Stock?

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Peabody Energy (BTU - Free Report) shares ended the last trading session 15.4% higher at $5.91. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 51.5% gain over the past four weeks.

Peabody Energy’s first quarter loss per share was narrower than expected.  The company is poised to benefit from improving seaborne thermal and met coal demand as gradual recovery from the pandemic across the globe is resulting in fresh customer demand. In addition, the company continues to strengthen its balance sheet and repaid long-term debt worth $54 million during the quarter.

The high natural gas prices in the United States has resulted in increasing usage of coal for electricity generation and U.S. coal inventories have dropped from last year’s level. Peabody with its high quality thermal mines is poised to gain from increase in domestic thermal coal demand.  

 

Price and Consensus

Price Consensus Chart for BTU

This coal mining company is expected to post quarterly loss of $0.80 per share in its upcoming report, which represents a year-over-year change of +37%. Revenues are expected to be $686 million, up 9.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Peabody Energy, the consensus EPS estimate for the quarter has been revised 39.9% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on BTU going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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