Peabody Energy Corporation (BTU) Stock Analysis

Peabody Energy’s primary competitive advantage is scale. It is the largest U.S. thermal coal producer, anchored by the North Antelope Rochelle Mine—the world’s largest coal mine by output. In 2024, Peabody sold 118 million tons of coal, outpacing domestic rivals such as Arch Resources and CONSOL Energy. This scale enables lower unit costs, particularly in the Powder River Basin, where Peabody’s cost per ton was $12.07 in 2024, compared to industry averages above $14.

Geographic and product diversification further strengthen Peabody’s position. The company operates 17 mines across the U.S. and Australia, supplying both thermal and metallurgical coal. Its Australian assets provide access to premium Asian markets, while U.S. operations are underpinned by long-term contracts with utilities—90% of 2024 sales were under contract, supporting cash flow stability.

Peabody’s logistics and marketing infrastructure is another edge. The company controls key port and rail access in Australia and maintains strong relationships with major power and steel customers globally. This reduces reliance on any single market or customer; in 2024, the largest customer accounted for just 8% of revenue.

However, Peabody faces structural headwinds: regulatory pressure, energy transition, and volatile seaborne pricing. While its cost base and diversification offer resilience, these advantages are shared to varying degrees by global peers such as Glencore and Whitehaven Coal, who also benefit from scale and Asian market access. Peabody’s edge is most pronounced in the U.S. thermal segment, where it remains the cost and volume leader.