Financial Performance - Peabody reported fourth quarter net income of $10.4 million, or $0.09 per diluted share, down from $30.6 million, or $0.25 per diluted share, in the prior year quarter [2]. - Full-year 2025 revenue totaled $3,861.5 million, a decrease from $4,236.7 million in the prior year, with a full-year net income of $(52.9) million, or $(0.43) per diluted share [2]. - Adjusted EBITDA for 2025 was $454.9 million, significantly lower than $871.7 million in the prior year [2]. - Total revenue for Q4 2025 was $1,022.3 million, a decrease of 9.0% compared to $1,123.1 million in Q4 2024 [43]. - Seaborne Thermal revenue decreased to $205.6 million in Q4 2025 from $309.3 million in Q4 2024, representing a decline of 33.5% [43]. - The total U.S. Thermal revenue for the year ended December 31, 2025, was $1,860.3 million, down from $1,921.4 million in 2024, a decrease of 3.2% [43]. - Adjusted EBITDA for the year ended December 31, 2025, was $454.9 million, compared to $871.7 million in 2024, a decline of 47.9% [43]. - Adjusted EBITDA for Q4 2025 was $118.1 million, up from $99.5 million in Q3 2025, representing an increase of approximately 18.3% [40]. - Income from continuing operations for Q4 2025 was $11.6 million, a significant recovery from a loss of $66.6 million in Q3 2025 [40]. Production and Sales - Seaborne Thermal volumes reached 3.3 million tons in Q4 2025, with an average export price per ton of $81.80, a 7% increase from the prior quarter [8]. - Peabody's Powder River Basin shipped 22.3 million tons in Q4 2025, achieving an Adjusted EBITDA of $44.8 million for the quarter, a 27% increase over 2024 [11]. - Total tons sold in Q4 2025 was 31.9 million, down from 33.1 million in Q4 2024, a decrease of 3.6% [43]. - Seaborne metallurgical volumes are expected to be 2.4 million tons, achieving approximately 75% of the premium hard coking coal price index, with costs anticipated at $117-$122 per ton [24]. - PRB volume is expected to be approximately 21 million tons at an average price of $13.40 per ton, with costs of approximately $11.75-$12.25 per ton [27]. - For Q1 2026, Seaborne Thermal volumes are expected to be 2.8 million tons, with export tons priced at $101.05 per ton and segment costs anticipated to be $51-$56 per ton [23]. Cash Flow and Assets - Peabody's cash and cash equivalents stood at $575 million at the end of 2025, supported by $336 million of operating cash flow from continuing operations [13]. - Cash, cash equivalents, and restricted cash at the end of Q4 2025 were $1,284.5 million, down from $1,382.6 million at the end of Q4 2024, a decrease of approximately 7.1% [37]. - Net cash provided by operating activities for Q4 2025 was $68.6 million, compared to $119.8 million in Q4 2024, reflecting a decrease of approximately 42.6% [37]. - The company reported a net cash used in financing activities of $11.4 million for Q4 2025, compared to $28.9 million in Q3 2025, indicating a decrease of about 60.6% [37]. - The company experienced a net change in cash of $(36.6) million in Q4 2025, contrasting with a positive change of $21.0 million in Q3 2025 [37]. Capital Expenditures and Expenses - Total capital expenditures for 2026 are projected to be $340 million, with SG&A expenses estimated at $115 million [30]. - Total segment costs for the year ended December 31, 2025, were $3,312.2 million, a decrease from $3,374.3 million in 2024, reflecting a reduction of about 1.8% [41]. - Total segment costs for Q4 2025 were $871.1 million, a decrease of 7.1% from $938.1 million in Q4 2024 [43]. Strategic Initiatives - The company is advancing projects related to rare earth elements and critical minerals, with significant testing ongoing at its Powder River Basin operations [19]. - Peabody's metallurgical coal realizations are expected to improve from approximately 70% of benchmark pricing in 2025 to 80% in 2026 [18]. - Peabody has been recommended for $6.25 million funding by the Wyoming Energy Authority for a pilot plant using PRB coal for REE/CM processing [21]. - The company expects to continue focusing on market expansion and strategic investments in rare earth elements and critical minerals [48]. Dividends and Shareholder Returns - The company declared a dividend of $0.075 per share, payable on March 10, 2026 [9]. - The company reported dividends paid of $9.0 million in Q4 2025, slightly down from $9.2 million in Q3 2025 [37]. - The company aims to preserve balance sheet strength and increase free cash flow to support shareholder returns [26]. Restructuring and Charges - The company incurred restructuring charges of $0.3 million in Q4 2025, down from $4.0 million in Q3 2025, showing a decline of approximately 92.5% [40].

Core Insights - Peabody reported a fourth quarter net income of $10.4 million, down from $30.6 million year-over-year, with Adjusted EBITDA of $118.1 million compared to $176.7 million in the previous year [1][2][29] - Full-year 2025 revenue was $3,861.5 million, a decrease from $4,236.7 million in 2024, with a net loss attributable to common stockholders of $(52.9) million, compared to a profit of $370.9 million in the prior year [2][29] - The company achieved record safety and environmental results, with a global Total Recordable Incident Frequency Rate (TRIFR) of 0.71, the lowest in its history [6][12] Financial Performance - Fourth quarter revenue was $1,022.3 million, with operating costs of $878.4 million, leading to an operating profit of $7.8 million [29] - Full-year Adjusted EBITDA was $454.9 million, significantly lower than $871.7 million in 2024 [2][29] - Operating cash flow from continuing operations was $336 million, with cash and cash equivalents totaling $575 million at year-end [12][29] Operational Highlights - Peabody's Centurion longwall mining operations commenced two months ahead of schedule, expected to produce 3.5 million tons in 2026 and ramping up to 4.7 million tons by 2028 [14][15] - The company reported strong performance in the Powder River Basin, shipping 22.3 million tons in the fourth quarter, a 4.9 million ton increase from 2024 [10][12] - Seaborne thermal coal volumes totaled 3.3 million tons in the fourth quarter, with an average export price per ton of $81.80, a 7% increase from the previous quarter [7][8] Market Conditions - U.S. market conditions are favorable for thermal coal, driven by higher natural gas prices and increased coal generation demand [3][6] - Peabody is advancing projects related to rare earth elements and critical minerals, with potential funding of $6.25 million for a pilot plant [17][22] Strategic Focus - The company aims to ramp up metallurgical coal production while maintaining its leadership in U.S. energy coal [19] - Peabody's 2026 guidance includes expected seaborne thermal volumes of 12.0 - 13.0 million tons and seaborne metallurgical volumes of 10.3 - 11.3 million tons [26][27]

Core Thesis - Peabody Energy Corporation (BTU) presents a bullish investment case driven by undervalued core operations, critical minerals optionality, and a cyclical rebound in coal demand linked to AI-driven power needs [3][7] Financial Metrics - As of January 30th, BTU's share was trading at $35.26, with trailing and forward P/E ratios of 26.89 and 25.19 respectively [1] - The core business is expected to generate approximately $900 million of EBITDA by FY27, implying an equity value of around $30–35 per share [4] Coal Business Valuation - The Centurion metallurgical coal project is valued at approximately $1.5 billion, supported by peer transactions and prior third-party interest [3] - Management believes potential liabilities related to the Anglo transaction are manageable and will not materially affect earnings power [4] Critical Minerals Exposure - BTU has identified significant concentrations of rare earth elements and critical minerals within its Powder River Basin mines, which are a priority for the U.S. Department of Energy [5] - Management claims these concentrations are competitive with peers, positioning BTU as a favored domestic supplier with potential value estimated at roughly $25 per share [6] Market Dynamics - AI-driven electricity demand is increasing coal generation and improving plant utilization, with delays in gas-fired capacity leading to greater reliance on coal [7] - Higher natural gas prices and urgent power needs make Powder River Basin coal a cost-effective solution, potentially driving an additional ~$700 million of EBITDA and ~$25 per share in value [7]

Investment Rating - The industry investment rating is maintained as "Increase" [5] Core Insights - The report highlights an increase in coal auction listings in Mongolia for 2025, with a total of 40.8832 million tons listed, up by 14.272 million tons. However, the transaction volume is slightly lower than in 2024, at 21.792 million tons, down by 0.576 million tons [2] - The report emphasizes the performance of specific companies, recommending investments in China Coal Energy (H+A), Yanzhou Coal Mining (H+A), China Shenhua Energy (H+A), and Shaanxi Coal and Chemical Industry. It also highlights companies focusing on smart mining, such as Keda Control, and those undergoing turnaround, like China Qinfa [3][7] - The report notes that the core port for coal transactions remains Ganqimaodu, contributing 83% of the total transaction volume [2] Summary by Sections Energy Prices Overview - As of January 30, 2026, Brent crude oil futures settled at $70.69 per barrel, up by $4.81 (7.3%) from the previous week. WTI crude oil futures settled at $65.21 per barrel, up by $4.14 (6.78%) [1] - Natural gas prices showed mixed trends, with Northeast Asia LNG spot prices at $11.68 per million British thermal units, down by $0.13 (-1.11%). The Dutch TTF gas futures settled at €40.65 per megawatt-hour, up by €1.28 (3.24%) [1] - Coal prices increased, with European ARA port coal prices at $101.50 per ton, up by $3.00 (3.05%), and Newcastle port coal prices at $116.75 per ton, up by $5.25 (4.71%) [1] Auction Performance - The report indicates that ETT led the auction with a transaction of 12.5696 million tons, followed by small TT and ER with 5.3632 million tons and 3.1296 million tons, respectively. The report also notes that coking coal transactions totaled 13.6192 million tons, down by 3.0656 million tons, while thermal coal transactions increased by 3.584 million tons to 8.1728 million tons [6] Key Stocks - The report provides a detailed table of recommended stocks, including: - China Coal Energy (601898.SH) with an EPS forecast of 1.21 for 2025 and a PE ratio of 11.32 - China Shenhua Energy (601088.SH) with an EPS forecast of 2.56 for 2025 and a PE ratio of 16.38 - Yanzhou Coal Mining (600188.SH) with an EPS forecast of 0.99 for 2025 and a PE ratio of 14.86 [7]

Group 1 - Peabody will announce its fourth quarter and year-end financial results for December 31, 2025, during an investor conference call on February 5, 2026, at 10:00 a.m. Central Time [1] - The earnings release will be distributed via PR Newswire before the market opens on February 5 and will also be posted on the company's website [2] - Peabody is a leading coal producer, focusing on providing essential products for affordable and reliable energy and steel production, with a commitment to sustainability shaping its future strategy [3]

Investment Rating - The report maintains a "Buy" rating for key companies in the coal mining sector, including China Shenhua, China Coal Energy, and Yanzhou Coal Mining [10][36]. Core Insights - The coal production in December 2025 saw a slight year-on-year decline of 1%, with a total output of 440 million tons. The annual production for 2025 was 4.83 billion tons, reflecting a growth of 1.2% compared to the previous year. For 2026, the domestic thermal coal production is expected to increase by only 20-30 million tons, reaching 3.85 billion tons, which is a growth of approximately 0.6% [1][13]. - Coal imports in December 2025 increased by 11.94% year-on-year, totaling 58.597 million tons. However, the total imports for the year were 49.027 million tons, a decrease of 9.6% compared to 2024. The report anticipates stable coal import levels in 2026, with significant attention on potential changes from the U.S. and Indonesia [2][17][21]. - The report highlights a 3.2% year-on-year decline in thermal power generation in December 2025, with total industrial power generation showing a marginal increase of 0.1%. The overall industrial power generation for the year was 971.59 billion kWh, up 2.2% from 2024 [3][22]. Summary by Sections Production - December coal production decreased by 1% year-on-year, with a total of 440 million tons produced. The daily average production was 14.1 million tons, and the total for 2025 was 4.83 billion tons, up 1.2% [1][13][14]. Imports - December coal imports rose by 11.94% year-on-year, amounting to 58.597 million tons. The total imports for 2025 were 49.027 million tons, down 9.6% from the previous year. The report expects stable import levels in 2026, with a focus on U.S. and Indonesian market dynamics [2][17][21]. Demand - Thermal power generation in December 2025 fell by 3.2% year-on-year, while total industrial power generation increased slightly by 0.1%. The total for the year was 971.59 billion kWh, reflecting a 2.2% increase from 2024 [3][22].

Investment Rating - The report maintains a "Buy" rating for several coal companies, including China Shenhua, Shaanxi Coal and Chemical Industry, and Xinji Energy, among others [9]. Core Insights - The coal market is experiencing a potential turning point driven by AI reshaping demand in the U.S. and supply constraints from Indonesia [2][3]. - The report highlights the importance of monitoring "black swan" events that could significantly impact coal prices, particularly changes in domestic policies and increased demand from the U.S. [3]. - The report indicates that the coal market lacks imagination under current fundamentals but could see price increases if unexpected events occur [3]. Market Overview - The CITIC Coal Index was reported at 3690.69 points, down 3.34%, underperforming the CSI 300 Index by 2.77 percentage points [4][74]. - As of January 16, 2026, the price of thermal coal at North Port was 704 RMB/ton, reflecting a week-on-week increase of 3 RMB/ton [30]. Key Areas of Analysis - **Thermal Coal**: Daily consumption remains strong, and pre-holiday production cuts are expected, suggesting a continued upward trend in coal prices [15]. - **Coking Coal**: Increased purchasing by steel companies is driving coking coal prices higher, with significant price increases noted in various coal types [35][48]. - **Market Sentiment**: The sentiment in the coal market is mixed, with some participants optimistic about future demand due to weather changes and others concerned about weak terminal demand [32]. Company Recommendations - The report recommends focusing on companies with strong fundamentals, such as China Shenhua, Yancoal, and others, which are expected to perform well in the upcoming periods [11][10]. - Companies like Keda Control and China Qinfa are highlighted for their potential recovery and growth prospects [11]. Price Trends - Coking coal prices have seen significant increases, with low-sulfur coking coal prices rising by 100 RMB/ton week-on-week [35]. - The report notes that the average profit per ton of coking coal has decreased, indicating pressure on margins for some producers [72]. Inventory and Supply Dynamics - As of January 16, 2026, the inventory of thermal coal at major ports was reported at 6440 million tons, showing a week-on-week decrease of 6 million tons [16]. - The report emphasizes the importance of monitoring inventory levels and production rates, particularly as the Chinese New Year approaches, which typically affects supply [15]. Conclusion - The coal industry is at a critical juncture, with potential for price increases driven by demand shifts and supply constraints. Investors are advised to focus on companies with strong market positions and growth potential in this evolving landscape [3][11].

Core Insights - Peabody's CEO Jim Grech has been appointed Chair of the National Coal Council, emphasizing the importance of coal in U.S. energy security and affordability [1][2] - U.S. coal-fueled generation increased by an estimated 13% in 2025, driven by extended coal plant lifespans and rising electricity demand from AI and data centers [2] - The National Coal Council advises the Secretary of Energy on coal-related policies, highlighting coal's affordability, reliability, and its role in steelmaking and critical minerals [3][4] Company Overview - Peabody is the largest coal producer in the U.S., operating eight thermal coal mines and one metallurgical coal mine domestically, along with five metallurgical coal mines and two seaborne thermal coal mines in Australia [6] - The North Antelope Rochelle Mine in Wyoming is the largest surface coal mine in the Western Hemisphere, producing 12% of U.S. coal [6] - Jim Grech, with over 35 years of experience in the coal and natural resources industry, has been with Peabody since 2021 and holds various board memberships [5]

Core Viewpoint - Peabody Energy (BTU), the largest US-listed coal miner, has experienced a valuation increase of over 300% in the past 8 months, suggesting potential overvaluation and caution for investors [1]. Company Summary - Peabody Energy's valuation has surged significantly, raising concerns about sustainability and future performance [1].

Group 1 - Roblox, Brunswick, and Peabody Energy are highlighted as companies with bullish charts this week [1]