BTU · Peabody Energy
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $19.62
Note written ·
Price against the kill line
11.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $19.62, on record since 11 November 2026. The shares are down 32.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $19.62, 16% above the 11 November 2026 close, would show the shares leading the S&P 500. Fourth-quarter Centurion sales above the 0.5 million-ton top of the guide would also show it.
Research onlyNot in the portfolio.
Key figures from the filings · Energy
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,096
- Revenue, change on a year (%)
- +8.3
- Operating margin (%)
- −3.9
- Net cash, cash less debt ($M)
- 138
- Enterprise value to sales (×)
- 0.5
All filed numbers
What Peabody Energy reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 1,096 | +8.3 | −3.9 |
| first filed | 1,003 | +12.7 | −10.5 |
| first filed | 973 | +3.9 | −4.5 |
| first filed | 1,022 | −9.0 | 0.8 |
| first filed | 1,012 | −7.0 | −8.0 |
| first filed | 890 | −14.6 | −4.3 |
| Pre-tax income ($M) | −33.2 |
| Net income ($M) | −32.8 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.3 |
| Operating cash flow ($M) | 95.8 |
| Capital spending ($M) | Not reported |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 434 |
| Debt ($M) | 297 |
| Net cash, cash less debt ($M) | 138 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) at 31 December 2025, filed 19 February 2026; +38.9% on a year | 5,000 |
| Receivables ($M) | 384 |
| Inventory ($M) | 451 |
| Shareholders' equity ($M) | 3,202 |
| Market value ($M) | 2,122 |
| Enterprise value, market value plus net debt ($M) | 1,985 |
| Enterprise value to sales (×) | 0.5 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not available |
| Price to book value (×) | 0.7 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 9.7% of shares outstanding sold short, 6.1 days of average trading to cover, +2.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $1.8M |
The thesis
Peabody Energy's shares are more likely to lag the S&P 500 than lead it over the next three months, because the Centurion metallurgical coal mine is ramping later and at higher cost than planned. The fourth-quarter 2026 report, expected around February 2027, settles whether Centurion delivers the 0.3–0.5 million tons of shipments the company now guides.
The shares closed at $16.91 on 11 November 2026. That is 29.8% below the close of three months earlier and 58.9% below the 52-week intraday high of $41.14 set on 19 March 2026. The 52-week closing low of $16.02 came on 5 November 2026, the session after the 4 November 2026 third-quarter report. Jefferies downgraded the shares to Hold from Buy on 10 November 2026 and cut its target to $18, a level just above the latest close.
Peabody reported a third-quarter 2026 loss of $0.27 per share, wider than the roughly $0.07–$0.08 loss analysts expected, on revenue of $1.096 billion against a $1.026 billion estimate (4 November 2026 results coverage). Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $97.5 million, up from $24.0 million in the second quarter (finsee.ai review of the filing). Guidance for Centurion, seaborne metallurgical volume and Powder River Basin thermal coal volume was all cut on the same day.
Bullish and bearish views on Peabody Energy Corporation
The bull case on Peabody Energy Corporation (BTU), in brief: metallurgical segment turned profitable. The bear case: Centurion costs ran above plan.
Bull case
- Metallurgical segment turned profitable. Seaborne metallurgical adjusted EBITDA was $5.2 million in the third quarter of 2026, against a $17.0 million loss in the second quarter (finsee.ai review of the 10-Q, 4 November 2026).
- Group earnings recovered from the second quarter. Adjusted EBITDA rose to $97.5 million from $24.0 million, and revenue beat the $1.026 billion estimate (4 November 2026).
- Capital spending is being reduced. A summary of the 4 November 2026 call reports a $40 million cut to capital spending, mostly from deferring Centurion North development, and management saying it is "100% confident" Centurion will reach full capacity.
- Some analyst targets sit well above the price. StoneX maintained Buy and lowered its target to $26 on 5 November 2026. B. Riley set a $30 target when it upgraded the shares on 26 October 2026, before the guidance cuts.
- Liquidity cushions the ramp. Peabody reported $959.1 million of total liquidity at 30 June 2026 and raised its revolving credit facility to $400 million in the second quarter. A third-quarter liquidity figure is in the 10-Q filed 6 November 2026.
Bear case
- Centurion costs ran above plan. Seaborne metallurgical cost was $162.45 per ton in the third quarter against a $130–$140 plan, and Peabody raised its full-year cost outlook to $150–$155 per ton (finsee.ai, 4 November 2026). Fourth-quarter cost is guided at $150–$160 per ton.
- Fourth-quarter Centurion volume steps down. Peabody guided to 0.3–0.5 million tons of Centurion shipments in the fourth quarter. A summary of the call says longwall faults held October output to about 45,000 tons and pushed steady output to after the next longwall move in the third quarter of 2027. Management gave no 2027 guidance.
- Seaborne metallurgical volume was cut. Full-year volume guidance fell to 8.9–9.1 million tons from 8.8–10.3 million (finsee.ai, 4 November 2026).
- Thermal coal volume fell sharply. Full-year Powder River Basin guidance dropped to 76.5–78.5 million tons from 82.0–88.0 million on weak US coal burn. Third-quarter shipments were 19.6 million tons against a 22.0 million plan, and that segment's adjusted EBITDA fell 71.0% from a year earlier to $15.0 million.
- Analysts are cutting. Jefferies downgraded to Hold and lowered its target to $18 on 10 November 2026, and StoneX trimmed its target on 5 November 2026.
Price setup
The shares closed at $16.91 on 11 November 2026, after $16.62 on 10 November 2026 and $17.03 on 9 November 2026. The 52-week closing low is $16.02 from 5 November 2026, so the latest close sits 5.6% above it.
The 50-day average close is $24.09 and the 200-day average close is $27.21, both as of 11 November 2026. The shares trade well below both, which marks a downtrend that began with the 19 March 2026 high of $41.14.
Form 4 filings show only small director share awards, 22 to 123 shares each at $27.64 on 3 September 2026. SEC filings list no open-market insider purchases or sales since 14 August 2026 that are itemised here.
Catalysts ahead
- ~December 2026 (est.): Start of the Queensland wet season, running to about March 2027. Rain can disrupt Australian shipping and test the fourth-quarter seaborne metallurgical guidance of 2.2–2.4 million tons.
- ~February 2027 (est.): Peabody fourth-quarter 2026 results. Shows whether Centurion shipped the guided 0.3–0.5 million tons, whether metallurgical costs met the $150–$160 per ton guide, and whether management gives 2027 guidance.
What would change the view
A daily close above $19.62, 16% above the 11 November 2026 close, would show the shares leading the S&P 500. Fourth-quarter Centurion sales above the 0.5 million-ton top of the guide would also show it.
What it trades with
Peabody trades with seaborne coking coal prices, US power demand for thermal coal, and the Australian dollar and Queensland weather for its seaborne mines. Its recent moves came from company results and analyst rating changes, not from sector flows. The sample of post-report sessions is too small to say how the shares react to coal price moves now.
The evidence, claim by claim (8)
- Q3 2026 revenue was $1.096 billion against a $1.026 billion estimate; loss per share was $0.27 against an estimated loss of about $0.07. Peabody Q3 2026 results coverage · as of
- Q3 2026 adjusted EBITDA was $97.5 million, up from $24.0 million in Q2 2026. finsee.ai review of Peabody Q3 2026 filing · as of
- Seaborne metallurgical adjusted EBITDA was $5.2 million in Q3 2026, against a $17.0 million loss in Q2. finsee.ai review of Peabody Q3 2026 filing · as of
- Q3 seaborne metallurgical cost was $162.45 per ton against a $130–$140 plan; full-year cost outlook raised to $150–$155 per ton. finsee.ai review of Peabody Q3 2026 filing · as of
- Q4 Centurion shipments guided at 0.3–0.5 million tons. finsee.ai review of Peabody Q3 2026 filing · as of
- Full-year Powder River Basin volume guidance cut to 76.5–78.5 million tons from 82.0–88.0 million; Q3 shipments were 19.6 million tons against a 22.0 million plan. finsee.ai review of Peabody Q3 2026 filing · as of
- Jefferies downgraded Peabody to Hold from Buy and lowered its price target to $18. Company news headlines, 10 November 2026 · as of
- StoneX maintained Buy and lowered its price target to $26. Analyst note reported 5 November 2026 · as of
Sources
- Peabody (BTU) Q3 2026 earnings review · finsee.ai ·
- Investors Hangout