UPDATE: Goldman Sachs Downgrades Peabody Energy to Neutral on Risk/Reward

Goldman Sachs reduced its rating on Peabody Energy

from Buy to Neutral but raised its price target from $26 to $28. Goldman Sachs noted, "We downgrade Peabody Energy to Neutral from Buy, as we now see -2% total return to our $28 target following outperformance. BTU is +21% since being added to the Americas Buy List May 28 vs. +22%/-19%/+9% for thermal peers/met peers/S&P 500 respectively. BTU is -26% the past 12 months vs. -34%/+16% for coal peers/S&P 500. BTU was +12% vs. +4%/0% for coal peers/S&P 500 October 22 after reporting 3Q adjusted EPS of $0.51 vs. consensus $0.34, indicating 2013 capex would be “meaningfully” below 2012 levels and highlighting $100 mn in incremental cost savings." Peabody Energy closed at $28.95 on Monday.