Summary
- Peabody Energy reported Q3'14 earnings that generally beat estimates.
- The company continues to forecast an oversupply of coal despite solid global demand.
- The stock remains beaten down, but it needs catalysts to turn around before it becomes a buy.
Reading through the
Peabody Energy (NYSE:BTU) quarterly transcript
and the absolute numbers are horrible. The domestic coal miner
continues to face an industry with short-term oversupply and promising
long-term global demand scenarios. The stock remains in a downtrend, but
one prime reason to not give up tracking the stock were the rebounds in
the steel stocks.
US Steel Group (NYSE:X)
is a major user of metallurgical coal and faced a similar weak outlook
back in mid-2013, yet the stock went on to soar roughly 150% in the
following year. At some point, the supply and demand equation could
reverse back in favor of coal miners similar to how it has for domestic
steel producers.
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full article at Seeking Alpha
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