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Goldman Sachs Group Inc (NYSE:GS) Cuts The Ratings of Weak Coal, Peabody Energy Corporation (NYSE:BTU) Down by 4.9%

Boston, MA 09/22/2014 (wallstreetpr) – One of the well-known coal mining company, Peabody Energy Corporation (NYSE:BTU)‘s shares went down by 4.9% as the ratings of weak coal were declined by Goldman Sachs Group Inc (NYSE:GS). The shares of BTU closed at $13.49 after GS downgrade the ratings from ‘neutral’ to ‘sell.’ BTU is one of the well-known coal mining and production firms in the world, based in U.S. with an exposure in Australia, which enables it to take advantage of rising demand in Asia-Pacific region.

BTU’s expectations from the industry:

As per the reports, Peabody Energy Corporation (NYSE:BTU) expects that demand of coal will revive globally in coming months. However, the prices of coal are under pressure, amidst of increasing export activities in countries like Columbia, Indonesia and Russia. Because of high exporting activities, the coal export market has become highly competitive. According to a report published by U.S. Energy Information Administration, the coal exporting activities in U.S. are expected to decline to 96 MMst in 2014 from 118 MMst in 2013. The drop in exporting activities will further affect various coal players in U.S. Japan, India and China are the major importers of thermal coal.

The trends have changed in the recent past as the top three coal importing countries are looking forward to finding alternative ways of energy producing, which cause less pollution and other harmful effects. When it comes to the domestic market, conditions are not good for BTU as the operations of the company are affected badly by ongoing congestion in railroads services. It had to bear a significant loss due to railroad congestion, due to which Peabody Energy Corporation (NYSE:BTU) lowered its sales target for 2014 to 185–190 million tons from 185–195 million tons. On top of it, the governments of most of the growing countries have started putting more emphasis on alternative sources of energy i.e. solar energy, which has further increased problems for BTU.

Published by Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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