A Look At Peabody Energy (BTU) Valuation As Coal Supply Tightens And 2026 Volumes Are Largely Contracted

Peabody Energy (BTU) is back in focus after industry reports flagged tightening Powder River Basin coal supply as coal plant retirements slip, with the company indicating most of its expected 2026 volumes are already contracted.

See our latest analysis for Peabody Energy.

The share price is at US$32.16 after a recent 8.3% 7 day share price return and 16.0% 30 day share price return. The 1 year total shareholder return of about 72% and very large 5 year total shareholder return suggest momentum has been building over time as investors reassess Peabody’s coal exposure and contract visibility.

If tightening coal supply has your attention, this could be a good moment to widen your radar and check out aerospace and defense stocks as another pocket of potential ideas.

With Peabody trading at US$32.16, a value score of 4, an approximately 8% gap to the average analyst price target, and a large modeled intrinsic discount, is the market generous here or still underestimating future growth potential?

Most Popular Narrative: 6.7% Undervalued

Peabody Energy’s widely followed narrative pegs fair value at about US$34.47 versus the US$32.16 last close, framing the current price as modestly below that estimate.

Ongoing global supply discipline, exacerbated by limited financing for new mines, regulatory constraints abroad, and the curtailment/closure of legacy assets, reinforces supply tightness in both thermal and met coal markets. This positions Peabody, with its diversified and existing asset base, to benefit from structurally higher pricing and more stable long-term revenues.

Read the complete narrative.

Want to see what kind of revenue profile, profit margin path, and future earnings multiple sit behind that valuation gap? The full narrative lays out a detailed earnings ramp, specific profit assumptions, and the implied P/E that must hold for this fair value to make sense.

Result: Fair Value of $34.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative still hinges on coal demand holding up as renewables expand and on Peabody managing regulatory pressure and long term environmental obligations.

Find out about the key risks to this Peabody Energy narrative.

Build Your Own Peabody Energy Narrative

If you see the numbers differently, or prefer to test your own assumptions, you can build a complete Peabody view in minutes with Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Peabody Energy.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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