Goldman Sachs Lowers PT On BTU

Goldman Sachs has lowered its price target from $77 to $74 on Peabody Energy Corp. BTU based on updated information about its Australian operations. In its report, Goldman Sachs writes, “While we continue to view Peabody's organic growth profile favorably and see risk/reward as improved following recent underperformance, we maintain our Neutral rating due to better upside/valuation for others. We viewed BTU's update on its Australia operations as generally positive, as all of its Queensland mines except for Burton are fully operational. Management believes issues with mine production, not rail or port capacity, is the bottleneck for industry exports to recover – we will look for updates from Australian peers on mine conditions before considering changes to our 2H11 met coal price view. Management expects PRB production to remain near the robust levels from 1Q, leading us to remain comfortable with our $13/ton 2011forecast unless other producers indicate big reductions or demand materially surprises. Catalysts to become more positive on shares include better-than-expected production, costs, or updates on its Asia JVs or proposed West Coast port.” As mentioned above, Goldman Sachs maintains its Neutral rating on the stock. BTU closed yesterday at $63.67.