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"BMO Research recommends contrarian energy investors look into Cloud Peak," BMO Capital Markets analysts wrote in a March 8 report. "Cloud Peak has an attractive coal contract position with 94% of FY2012 production priced at $13.47/t and approximately 60% of FY2013 production priced at US$14.27/t. In addition, Cloud expects to sell ~4.5Mt to the export market via Westshore Terminals in Vancouver; just 4% of volumes, but at very attractive margins given strong thermal coal pricing in the Pacific Basin. Cloud Peak also has below-average costs for the Powder River Basin, one of the lowest-cost coal producing regions in the world, allowing it to compete even at natural gas pricing nearing US$3/mmBcf."
Shares of Cloud Peak Energy fell to a 52-week low of $15.72 on Thursday. The stock's 52-week high of $24.34 was set on Oct. 28.
Cloud Peak Energy has an estimated price-to-earnings ratio for next year of 7.25 times; the average for coal companies is 12.2. For comparison,
Peabody Energy(BTU) has a lower forward P/E of 6.63;
Consol Energy's(CNX) forward P/E is 11.36.
Ten of the 19 analysts who cover Cloud Peak Energy rated it buy. Eight analysts gave the stock a hold rating and one rated it sell.
TheStreet Ratings gives Cloud Peak Energy a
C grade and a hold rating. The stock has declined 18.32% year to date.