Peabody Energy: Centurion Setback Creates Near-Term Pressure but Supports Undervalued Long-Term Upside

Chris LaFemina, an analyst from Jefferies, assigned the Buy rating on Peabody Energy Comm. The associated price target was raised to $44.00.

Chris LaFemina has given his Buy rating due to a combination of factors that, in his view, still support upside in BTU despite the Centurion setback. He acknowledges near-term pressure from lower-than-expected first quarter metallurgical coal shipments caused by commissioning and equipment issues at the Centurion mine, which have led him to reduce earnings forecasts and trim volume expectations for 2026 and slightly for 2027.

However, he emphasizes that equipment problems appear to be addressed, the full-year met coal shipment guidance has been maintained, and Centurion remains central to Peabody’s strategy as a future source of substantial low-cost premium met coal volumes. Combined with robust seaborne thermal coal pricing, he believes these factors should drive meaningful free cash flow and earnings growth, leaving BTU trading on what he views as undemanding 2027 valuation metrics and justifying a continued Buy recommendation.