« Earnings Thursday After Close | Main | Today’s Markets 5/12/08 »
Very Bullish on Peabody
By admin | May 9, 2008
You know i have watched this stock for years and being a bit pricey for me i have bought a bit at a time. Now i site on a few hundred shares and been in the green since. If you can afford to buy a lot of shares at once this is a good one to be just increasing your position on over the course of the year…
Morgan Stanley is out with a positive call on Peabody (BTU), raising their target significantly from $54 to $80. According to the firm, Peabody is increasingly a play on execution of a growth story in Australia. BTU has underperformed peers, largely due to disappointing results in its Australian segment. Morgan Stanley thinks results will improve as coal chain expansions should allow Peabody to grow production, ease cost pressures, and improve its mix of high-margin metallurgical coal.
The firm thinks BTU can reach +30 mm tonne production sooner than expected, and on minimal investment. They expect improved pricing and volume, mostly in Australia, to result in EBITDA tripling from 2007 to 2009.
Morgan Stanley reiterates Overweight.
Notablecalls: This is a pretty powerful call, ladies and gentlemen. Peabody has lagged peers recently due in large part to the performance of its Australian operations. Now Morgan Stanley says things are about to get better there and that the stock will catch up with peers.
Topics: Daily Updates |
Comments
You must be logged in to post a comment.