Dallas, Texas 01/07/2014 (FINANCIALSTRENDS) – Peabody Energy Corporation (NYSE:BTU) ride over Christmas appeared to be buoyant as Goldman Sachs indicated higher growth rating for Peabody Energy over other Energy stocks such as Consol Energy. But Goldman Sachs did indicate SunCoke as well had a good upside, as it finalized sale of assets for its coal sector.
Peabody Energy Corporation (NYSE:BTU) has been working on several fronts, like a joint venture deal with Shenhua, China’s largest coal mine to supply coal, to see such good upside. This by far one of the largest income-outlays for the energy company and is expected to notch high returns from this alone. Shenhua in turn, is one of the largest coal supplying companies in China and distributes coal to coal-hungry industries and factories that dot the entire country line.
JV leads upside rating
Peabody Energy Corporation (NYSE:BTU) will hold 50% of the stake in the Shenhua Group and will commence operations in a couple of months, later this year. The main reason for Shenhua group seeking higher coal resources is to meet thermal coal needs of its various subsidiaries which are engaged in generating energy and some electricity.
Peabody Energy Corporation (NYSE:BTU) with this venture has taken a very important step forward to meet the demands of its Asian market segment.
However, BTU will see a spot of financial trouble. Considering the delays in starting ‘a new longwall top coal caving system’ at its North Gooonyella Mine, it is expected that the returns would be drastically less. Along with that, the Metropolitan Mine has just moved out of its labor action at the mine and is expected to see some more action in the near future.
Now, with analysts backing long-term, BTU may see more action at the stock markets in the latter parts of the year perhaps.