UPDATE: Dahlman Rose Downgrades Peabody Energy to Hold on Lack of Upside Through 2013.
Dahlman Rose lowered its rating on Peabody Energy (NYSE: BTU) from Buy to Hold on lack of sufficient upsides to updated price estimates.
Dahlman Rose commented, "Our average expected price per ton for the fourth quarter and 2013 drops to $127 from $145 and $158 per ton previously. We expect Peabody to sell 17 million tons of met coal in 2013, versus 212 million tons total, but met sales are by far the largest contributor to EBITDA. The cut to met pricing drives a $519 million drop in EBITDA, to $1655 million from $2174 million. Peabody has a strong balance sheet and is heavily diversified with stable, low-cost thermal operations in the Powder River Basin."
Peabody Energy closed at $21.63 on Friday.
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