BTU - Peabody Energy Stock: Why I Believe It's A Strong Buy Despite Bad Guidance

2024-04-12 09:15:00 ET

Summary

• Natural gas has gained ground over coal as a cleaner source of energy, leading to a decline in coal's market share.
• Natural gas prices are so low in certain areas of the U.S. that producers are paying to have shippers take their gas.
• Peabody Energy, a coal company, issued poor guidance for its first-quarter revenue due to operational headwinds and competition from natural gas.
• However, BTU remains in a great spot to benefit from what could be a strong long-term coal bull case.

(A Lengthy) Introduction

• FC Barcelona vs. Real Madrid (soccer).
• Manchester United vs. Liverpool (soccer)
• India vs. Pakistan (cricket)
• Boston Red Sox vs. New York Yankees (baseball)
• Los Angeles Lakers vs. Boston Celtics (basketball).

Above, I listed some of the world's biggest rivalries. If you're into sports, odds are you are familiar with at least some of these.

Another (non-sports) rivalry is coal versus natural gas.

Both are very abundant commodities that play major roles in global energy security. In fact, one could make the case that our current prosperity is built on coal, the commodity that fueled the industrial revolution....

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