Australia Has Been Good To Peabody

JP Morgan has issued a research report on Peabody Energy BTU as the company has witnessed Australia generating about half of its EBITDA from just 12% of its coal sales. In the report, JP Morgan writes "Peabody's Australian operations are growing off a low base into its mine capacity, and this has protected it from the high levels of cost inflation seen in much of the country. Production mix changes together with currency hedges at 0.80 US$/A$ led to per ton costs that fell 3% to US$56/t. The low cost currency hedges carry on through 2011." JP Morgan maintains its Overweight rating but has raised the price target from $65 to $63. Peabody Energy closed yesterday at $50.53.