Value
9.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.8 |
| EV/EBITDA | 6.8 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 6.1x
- ▸PEG: 0.01
- ▸Attractively valued
BTU · Why this verdict
Why Peabody Energy (BTU) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
BTU screens cheaply on forward earnings with 32% analyst upside, but the combination of sub-floor business quality, a recent earnings miss of -369%, high short interest at 16%, and an elevated put/call ratio of 1.44 makes the risk profile unattractive despite the surface valuation discount.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of 6.9x and a PEG near zero, the stock screens deeply discounted relative to its near-term earnings power, with analysts projecting roughly 32% upside to their consensus target. Valuation breakdown | Over 12 months, the forward multiple expands above 10x as cash flows stabilize, or the share price closes more than half the gap to the analyst consensus target of $29.87. | →Stable |
| CounterA trough multiple in a commodity business reflects structural uncertainty, not a pricing error; the most recent quarter delivered an earnings miss of -369%, signaling that the near-term earnings on which the cheap multiple is based may not materialize. | ||
Business quality is below the minimum floor — returns on equity and assets show no meaningful profitability, free cash flow is negative as a percentage of revenue, and the competitive position is described as lacking a moat — making this an unacceptable risk profile for a new position. Quality breakdown | If quality recovers, the Piotroski F-Score rises above 6 and free cash flow turns positive as a percentage of revenue for 2 consecutive quarters. | →Stable |
| CounterThermal coal businesses can generate outsized free cash flow when commodity prices spike; a favorable pricing cycle could lift all quality metrics rapidly from current depressed levels. | ||
Short interest stands at 16% with an elevated put/call ratio of 1.44 and implied volatility at 71%, indicating the market is pricing in meaningful downside risk and that a sizable cohort of informed participants are positioned against the stock. Risk breakdown | If the bear pressure abates, short interest falls below 8% and the put/call ratio drops below 0.8 within two quarters. | →Stable |
| CounterExtreme short positioning can create a squeeze catalyst if a positive earnings surprise or commodity price move forces short covering, compressing the ratio rapidly. | ||
With seaborne international markets representing 51% of the business, revenues are heavily exposed to global coal pricing and trade policy shifts that are outside management's control. Bear case | If concentration risk is being managed, seaborne revenue falls below 40% of the total mix over the next 4 quarters as domestic volumes grow. | →Stable |
| CounterSeaborne exposure also provides access to premium-priced export markets that can boost realized prices above domestic benchmarks during periods of global supply tightness. | ||
At a forward P/E of 6.9x and a PEG near zero, the stock screens deeply discounted relative to its near-term earnings power, with analysts projecting roughly 32% upside to their consensus target.
→StableValuation breakdown
- Expectation
- Over 12 months, the forward multiple expands above 10x as cash flows stabilize, or the share price closes more than half the gap to the analyst consensus target of $29.87.
CounterA trough multiple in a commodity business reflects structural uncertainty, not a pricing error; the most recent quarter delivered an earnings miss of -369%, signaling that the near-term earnings on which the cheap multiple is based may not materialize.
Business quality is below the minimum floor — returns on equity and assets show no meaningful profitability, free cash flow is negative as a percentage of revenue, and the competitive position is described as lacking a moat — making this an unacceptable risk profile for a new position.
→StableQuality breakdown
- Expectation
- If quality recovers, the Piotroski F-Score rises above 6 and free cash flow turns positive as a percentage of revenue for 2 consecutive quarters.
CounterThermal coal businesses can generate outsized free cash flow when commodity prices spike; a favorable pricing cycle could lift all quality metrics rapidly from current depressed levels.
Short interest stands at 16% with an elevated put/call ratio of 1.44 and implied volatility at 71%, indicating the market is pricing in meaningful downside risk and that a sizable cohort of informed participants are positioned against the stock.
→StableRisk breakdown
- Expectation
- If the bear pressure abates, short interest falls below 8% and the put/call ratio drops below 0.8 within two quarters.
CounterExtreme short positioning can create a squeeze catalyst if a positive earnings surprise or commodity price move forces short covering, compressing the ratio rapidly.
With seaborne international markets representing 51% of the business, revenues are heavily exposed to global coal pricing and trade policy shifts that are outside management's control.
→StableBear case
- Expectation
- If concentration risk is being managed, seaborne revenue falls below 40% of the total mix over the next 4 quarters as domestic volumes grow.
CounterSeaborne exposure also provides access to premium-priced export markets that can boost realized prices above domestic benchmarks during periods of global supply tightness.
Per-dimension breakdown
Quality
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.6 |
| FCF quality | 0.0 |
| Moat | 4.6 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -0% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
3.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
Momentum
1.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 17, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+4.9%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 5.0 |
| Price target | 9.4 |
- ▸Analyst upside: 45%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $193,946 (0.007% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.5 |
| quality rank | 0.0 |
| growth rank | 5.0 |
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.5 |
| support resistance | 9.1 |
| 52w position | 1.6 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.9 |
| days to cover | 7.2 |
| volatility | 0.0 |
| put call | 7.9 |
| implied vol | 0.9 |
| beta | 10.0 |
| debt equity | 9.5 |
- ▸High short interest justified: 16%
- ▸High IV: 75%
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 5.4 |
| dividend safety | 6.0 |
| news activity | 6.0 |
- ▸Dividend: 129.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- ASYMMETRY:2.3>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:1.2<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.31
Upside
+26.1%
Downside
11.3%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 17, MACD bearish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $2.8B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 9.1 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:1.2<4.5.
The strongest dimensions are Value at 9.1, Technical at 6.4, and Sentiment at 5.8; the weakest are Momentum at 1.2, Quality at 2.0, and Growth at 3.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.31 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1At a forward P/E of 6.9x and a PEG near zero, the stock screens deeply discounted relative to its near-term earnings power, with analysts projecting roughly 32% upside to their consensus target.
Trip ifForward P/E expands above 10x for 2 consecutive quarters, indicating the value discount has closed.
- P2Business quality is below the minimum floor — returns on equity and assets show no meaningful profitability, free cash flow is negative as a percentage of revenue, and the competitive position is described as lacking a moat — making this an unacceptable risk profile for a new position.
Trip ifFree cash flow rises above 0% of revenue for 2 consecutive quarters.
- P3Short interest stands at 16% with an elevated put/call ratio of 1.44 and implied volatility at 71%, indicating the market is pricing in meaningful downside risk and that a sizable cohort of informed participants are positioned against the stock.
Trip ifShort interest falls below 8% and put/call ratio drops below 0.8 for 2 consecutive months.
- P4With seaborne international markets representing 51% of the business, revenues are heavily exposed to global coal pricing and trade policy shifts that are outside management's control.
Trip ifSeaborne revenue falls below 40% of total revenue mix for 2 consecutive annual periods.