Downward Revisions At Arch Coal, Peabody Won’t Deter Growth
By Takeover Analyst:
For investors looking to benefit from a recovery and a shift back into the industrial economy, coal producers offer an ideal way to back such an outlook. Currently, Arch Coal (ACI) is rated a “buy” on the Street while Peabody (BTU) is rated near a “strong buy.” The two have recently been revised downwards following signs of greater macro uncertainty. Consensus estimates for EPS fell for a net change of -2.8% at Arch Coal versus -33.4% at Peabody.
From a multiples perspective, Peabody is significantly the cheaper of the two. It trades at a respective 9.9x and 7.8x past and forward earnings with a dividend yield of 0.9%. Arch Coal, on the other hand, trades at a respective 19.6x and 7.9x past and forward earnings.
At the third quarter earnings call, Peabody’s CEO, Greg Boyce, noted improving developments:
Now in a time when one can receive mixed signals from the
Investing, Long Term Investment, stock market | admin February 3, 2012
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