Peabody Energy is is the largest U.S. coal producer. The company operates through six operating segments: Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, and Trading and Brokerage. It is involved in mining, preparation, and sale of thermal coal primarily to electric utilities; and metallurgical coal that include hard coking coal, semi-hard coking coal, semi-soft coking coal, and low-volatile pulverized coal injection for industrial customers. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. The company was founded in 1883 and is based in St. Louis, Missouri.
BTU Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Peabody Energy Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Peabody Energy Corp ranked in the 23th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for BTU, they are:
The company's debt burden, as measured by earnings divided by interest payments, is -0.15; that's higher than merely 18.15% of US stocks in the Basic Materials sector that have positive free cash flow.
The company's compound free cash flow growth rate over the past 1.99 years comes in at -0.33%; that's greater than just 4.79% of US stocks we're applying DCF forecasting to.
18% of the company's capital comes from equity, which is greater than just 9.99% of stocks in our cash flow based forecasting set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Peabody Energy Corp? See AWI, BCPC, AA, APOG, and ECL.