Update shared on03 Oct 2025
Fair value Increased 16%Peabody Energy's analyst-derived fair value has been raised from $20.05 to $23.28 per share. Analysts cite the company's strengthened earnings outlook and expanding global opportunities as reasons for the upward revision.
Analyst Commentary
Recent research coverage has highlighted several factors influencing the fair value and investment outlook for Peabody Energy. Analysts are divided, with both optimistic and cautious perspectives emerging regarding the company's valuation, growth strategy, and operational risks.
Bullish Takeaways- Bullish analysts see Peabody's expansion in metallurgical coal as a key driver for future growth. This move provides greater diversification beyond its traditional thermal coal base.
- The company's scale and international reach are regarded as major competitive advantages, especially for capturing new opportunities in Asian and emerging markets.
- Upward price target revisions are linked to improving earnings potential, as models are updated to account for standalone performance and global demand trends.
- Domestic power demand and favorable regulatory developments are viewed as supportive factors for Peabody's thermal coal segment, helping to sustain higher share valuations.
- Bearish analysts point to lingering uncertainty related to Peabody's terminated purchase agreements and the outcome of major deals, noting that these issues could materially impact share performance.
- Some caution that the company is exposed to both upside and downside risks, particularly in connection with execution on acquisitions and deal developments.
- Despite incremental price target increases, a neutral stance remains among some analysts because of risks associated with the evolving coal market and regulatory environment.
What's in the News
- Peabody Energy completed its share repurchase plan announced in April 2023. The company bought back a total of 23,757,702 shares, representing 17.55% of outstanding shares, for $530.2 million. No additional shares were repurchased between April and June 2025 (Key Developments).
- For the third quarter of 2025, Peabody provided production guidance, including expected Seaborne thermal coal volumes of 3.9 million tons and cost per ton between $45 and $50. Improved margins are projected in the PRB segment (Key Developments).
- The company raised full-year 2025 guidance, anticipating higher Seaborne thermal volumes, lower per-ton costs in both Seaborne segments, and increased PRB volumes. These updates are attributed to strong first half performance and recent legislation (Key Developments).
Valuation Changes
- Fair Value per Share has risen from $20.05 to $23.28. This reflects a reassessment of Peabody Energy's outlook.
- Discount Rate has decreased slightly from 7.08% to 6.82%. This indicates marginally lower perceived risk or cost of capital.
- Revenue Growth projections have declined from 6.41% to 5.29%. This shows tempered expectations for top-line expansion.
- Net Profit Margin forecast has increased from 9.62% to 11.54%. This suggests anticipated improvements in operational efficiency or profitability.
- Future P/E ratio has edged down from 6.36x to 6.32x. This signals only a marginal change in expected market valuation relative to earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.