This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

9 Coal Stocks With Upside

2. Peabody Energy (BTU) owns majority interests in 28 coal mining operations located in the U.S. and Australia. Besides, the company also markets, brokers and trades coal. Peabody structures its operations into three mining segments -- Western U.S. and Midwestern U.S. Mining, Australian Mining, and Trading and Brokerage.

Consolidated revenue for the first quarter of 2011 was reported at $1.74 billion, increasing 15% from the year-ago period on sales of 61.2 million tons. EBITDA for the quarter rose 17% to $416.2 million. Net income during the quarter increased to $176.5 million or 65 cents per share, compared to $133.7 million or 50 cents per share in earlier year quarter. On June 7, 2011, the company paid a dividend of $0.085 per share.

Meanwhile, Peabody is seen benefitting from China's demand as the country is currently facing acute coal deficit leading to power outages. The company's CEO recently said that coal demand from India and China would escalate over the next 10 years. BTU has its interests in Indonesia and Australia and is on the lookout for assets in Africa. However, China seems to be a major opportunity and Peabody is eyeing joint ventures with four to five opportunities on hand. During 2011, China is expected to import about 70 million tons of coal, while India will import about 60 million.

For the second quarter of 2011, the company expects to benefit from increased volumes in Australia coupled with higher metallurgical and thermal coal prices. Peabody guides EBITDA in the range of $525 to $625 million and adjusted diluted earnings per share of 85 cents to $1.10. For full year 2011, the company targets EBITDA to range from $2.1 to $2.5 billion with adjusted diluted earnings per share of $3.5 to $4.5. Meanwhile, full year sales are seen between $245 and $265 million tons.

Of the 26 analysts covering the stock, 85% recommend a buy and 12% rate a hold. Data from Bloomberg has analysts predicting an average 12-month price target of $77.16, about 39.7% higher than the stock's recent price.

9 of 10

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs