Shareholders in Peabody Energy Corporation (NYSE:BTU) had a terrible week, as shares crashed 28% to US$16.03 in the week since its latest third-quarter results. Revenues of US$1.1b beat expectations by a respectable 7.5%, although statutory losses per share increased. Peabody Energy lost US$0.27, which was 149% more than what the analysts had included in their models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Peabody Energy's five analysts are now forecasting revenues of US$4.68b in 2027. This would be a meaningful 14% improvement in revenue compared to the last 12 months. Peabody Energy is also expected to turn profitable, with statutory earnings of US$2.93 per share. In the lead-up to this report, the analysts had been modelling revenues of US$4.68b and earnings per share (EPS) of US$2.93 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Peabody Energy
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$30.92. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Peabody Energy, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$27.50 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Peabody Energy's growth to accelerate, with the forecast 11% annualised growth to the end of 2027 ranking favourably alongside historical growth of 0.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Peabody Energy to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Peabody Energy going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Peabody Energy that you should be aware of.
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