Peabody Energy Corporation (BTU) Stock Analysis

Peabody Energy’s primary competitive advantage is scale. As the largest U.S. thermal coal producer and a major seaborne metallurgical coal supplier, BTU benefits from operational leverage, purchasing power, and a broad customer base. In 2024, Peabody produced 118 million tons of coal, outpacing U.S. rivals such as Arch Resources (68 million tons) and Alliance Resource Partners (36 million tons). Its Powder River Basin (PRB) mine, North Antelope Rochelle, is the world’s largest, with 59.7 million tons produced in 2024 and low delivered costs ($11.50–$12.00/ton).

Geographic and product diversification further insulate Peabody from regional demand shocks. The company operates 17 mines across the U.S. and Australia, serving both thermal and metallurgical coal markets. This contrasts with U.S.-centric peers like Consol Energy or Alliance, which lack seaborne exposure.

Peabody’s long-term supply contracts—covering roughly 90% of U.S. thermal sales—provide revenue stability, while its Australian mines access premium Asian markets, where demand for steelmaking coal remains robust. By comparison, Arch and Warrior Met Coal are more exposed to spot pricing and single-product risk.

Cost discipline is evident: 2024 gross margin was 19.3%, above the global coal industry average. The company’s “fortress” balance sheet, with $586 million in cash and minimal net debt, supports resilience and capital returns. However, Peabody faces structural headwinds from regulatory and ESG pressures, and its cost advantage is less pronounced in metallurgical coal, where global peers like BHP and Glencore have similar scale and logistics.