{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "BTU",
  "name": "Peabody Energy Corporation",
  "url": "https://frontierpicks.com/dossiers/BTU/",
  "json_url": "https://frontierpicks.com/dossiers/BTU.json",
  "status": "DORMANT",
  "current_conviction": "MEDIUM",
  "graded_conviction": null,
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Centurion is the whole company-specific leg: seaborne met printed $(17.0)M adjusted EBITDA on 2.5Mt in Q2 while the full-year Centurion target was cut to 2.0–2.5Mt on 2026-07-29, against group EBITDA of $24.0M. Thermal segments fund the ramp; the coal-for-AI-power framing is already widely covered, so the 2026-10-29 Q3 print grades whether tons ship — no company-dated catalyst before then.",
  "invalidation_trigger": "A weekly close below $24 (gives back the late-August coal-equity re-rating and leaves price a full leg under the UBS $26.50 mark of 2026-08-04), or Centurion Q3 sales printing beneath the 0.5Mt low end at the 2026-10-29 report.",
  "catalyst_date": null,
  "outcome": "OPEN",
  "outcome_date": null,
  "invalidation_fired": null,
  "themes": [
    "oil-energy-geopolitical",
    "critical-materials-rare-earths",
    "ai-datacenter-infrastructure"
  ],
  "tags": [],
  "sources": [],
  "notes": [
    "Roughly half of guided 2026 volume is low-margin PRB thermal (82.0–88.0Mt), so headline tonnage overstates earnings sensitivity to coal prices.",
    "Australian operations expose results to AUD/USD and to Queensland wet-season shipping disruption in the December–March window.",
    "$250M of convertible notes due 2031 were issued in Q2 2026; equity-linked paper sits on the cap table alongside the residual 2028 converts.",
    "The quarterly dividend is $0.075/share (declared 2026-07-29, paid 2026-09-03) — immaterial as price support at a $27.64 reference close.",
    "Q2 2026 capital actions released ~$350M of restricted cash and collateral and raised the revolver to $400M; liquidity was $959.1M at 2026-06-30."
  ],
  "body_markdown": "## Current Thesis\n\nTwo stories sit on one ticker. The one that gets Peabody quoted in AI-power coverage is Powder River Basin thermal — 82.0–88.0 million tons guided for 2026 into a US grid deferring coal retirements. The one that actually moves the P&L over the next two quarters is Centurion, the Australian premium hard coking coal longwall, which is still consuming money rather than producing it: the seaborne metallurgical segment printed $(17.0)M of adjusted EBITDA on 2.5Mt in Q2 2026, and on 2026-07-29 the full-year Centurion sales target was cut to 2.0–2.5Mt with 0.5–0.7Mt targeted for Q3. Group adjusted EBITDA was $24.0M in the quarter against $93.3M a year earlier, on revenue of $1,003.2M.\n\nThe narrative is maturing — coal-as-AI-power has been widely covered since the 2025 US policy shift and the company-specific leg has already been re-dated once at the 2026-07-29 print, so what remains is whether tons ship, resolved at the 2026-10-29 Q3 report.\n\n## Bull Case\n\n- **The met segment is a swing item, not a broken one.** Seaborne metallurgical adjusted EBITDA was $(17.0)M on 2.5Mt in Q2 2026 while absorbing Centurion commissioning costs (8-K, 2026-07-29). Management framed the remaining constraint as roof control in \"a limited rock fault zone\" and targets 1.5–2.0Mt of Centurion sales in H2 2026 — a bounded, dated claim that the 10-29 print grades directly.\n- **Seaborne thermal is funding the ramp.** $52.1M of adjusted EBITDA on 3.0Mt with export realized pricing of $95.87/ton in Q2 2026 (8-K, 2026-07-29).\n- **The Q2 capital work removed a refinancing overhang.** $250M of 2031 convertible notes issued, $241.2M of 2028 converts repurchased, roughly $350M of restricted cash and collateral released, and the revolving facility raised to $400M; cash was $526.3M and total liquidity $959.1M at 2026-06-30.\n- **Price has not run ahead of the story.** The 2026-09-03 close of $27.64 sits 29.6% below the $39.25 52-week high on the adjusted series, with a three-month price change of -1.3% — the shares have not been paid for a ramp that has not yet been delivered.\n- **Group context is supportive.** The Oil, energy & geopolitical cluster was tagged accelerating again on 2026-09-03, and thermal coal equities rallied in late August, with BTU reported up 7.3% in a single session during that move (Simply Wall St commentary, late August 2026).\n\n## Bear Case\n\n- **The reported quarter was worse year-over-year on every line that matters.** Net loss attributable to common of $(90.6)M, or $(0.74) per diluted share in Q2 2026, versus $(0.23) a year earlier; adjusted EBITDA $24.0M versus $93.3M (8-K, 2026-07-29).\n- **The AI-power demand story is not visible in PRB economics.** Powder River Basin adjusted EBITDA was $(7.1)M on 16.4Mt in Q2 2026, attributed to weather and maintenance downtime. A negative segment result on 16.4 million tons is the counter-evidence to the demand narrative the sector is being marked on.\n- **Centurion guidance has already moved once.** The full-year target was set at 2.0–2.5Mt on 2026-07-29. A ramp that has been re-dated has no privileged claim on the next quarter, and Q3's 0.5–0.7Mt band is narrow enough to miss.\n- **Capex is large relative to current cash generation.** 2026 capital expenditures guided at $340M against $24.0M of group adjusted EBITDA in Q2; the $0.075 quarterly dividend declared 2026-07-29 and paid 2026-09-03 is a further, if small, cash use.\n- **The most recent published sell-side mark is below the market.** UBS maintained Neutral and lowered its price target to $26.50 on 2026-08-04 — under the 2026-09-03 close of $27.64.\n- **Australian cost and governance friction.** On 2026-08-06 Peabody back-paid nearly $5M to 197 workers under a Fair Work Ombudsman enforceable undertaking; an 8-K dated 2026-08-27 records a consulting agreement transitioning the Chief Operating Officer, a leadership change during the ramp.\n\n## Setup & Price Structure\n\nThe reference close is $27.64 on 2026-09-03, 29.6% under the $39.25 52-week high, with RSI(14) at 60.2 and a three-month price change of -1.3%. That combination describes a mid-range tape with an upward tilt off the summer lows — not a base being broken out of, and not a name extended against its own annual range.\n\nCrowding and positioning observables, stated as observables:\n\n- **Retail-sentiment coverage clustered after the move, not before it.** Benzinga's 2026-08-25 piece screened BTU alongside TK and PSX as overbought energy names on RSI — momentum coverage arriving at the top of a sector rally.\n- **The market is trading above the latest published sell-side mark**, the UBS $26.50 target of 2026-08-04, which means the incremental bid is paying for a ramp the covering analyst has not yet underwritten.\n- **Equity-linked supply exists.** The $250M of convertible notes due 2031 issued in Q2 2026 is dilution-linked paper on the cap table, offset in cash terms by the $241.2M repurchase of the 2028 converts.\n- **No imminent earnings date.** The next scheduled company print is 2026-10-29 — 55 days after the reference close — so there is no binary compressing positioning inside the next month.\n- **The cluster read is unstable.** The Oil, energy & geopolitical status trail runs 07-26 accelerating → 08-07 dead → 08-11 accelerating → 09-03 accelerating. A group that flipped twice in five weeks is weak corroboration for a single name.\n\n## Catalyst Calendar (next 30 days)\n\n- **2026-09-30 — Q3 2026 quarter close.** The window for the 0.5–0.7Mt Centurion Q3 sales target ends here; the number itself is not disclosed until the October report.\n- **No company-scheduled event falls between 2026-09-04 and 2026-10-04.** The only inputs inside the window are seaborne index prints (premium hard coking coal, Newcastle thermal), US power-burn and gas data, and any unscheduled 8-K.\n- **~2026-10-29 (est., per Yahoo Finance and Zacks earnings calendars) — Q3 2026 results.** Outside the 30-day window and the next genuine binary: Centurion Q3 tons against the 0.5–0.7Mt band, whether seaborne met adjusted EBITDA turns positive from $(17.0)M, whether PRB recovers from $(7.1)M, and the next dividend declaration.\n\n## What Would Change Our Mind\n\nThe read breaks on execution first. A third re-dating of Centurion — Q3 sales printing under the 0.5Mt low end on 2026-10-29, or the 2.0–2.5Mt full-year target cut again — removes the only company-specific leg that is not already priced by the sector, because the thermal segments alone produced $79.0M of combined adjusted EBITDA in Q2 against $340M of guided 2026 capex. A second PRB quarter of negative adjusted EBITDA would do similar damage to the AI-power framing that is carrying the group multiple.\n\nOn price, the gradeable condition is a weekly close below $24, which gives back the late-August coal-equity re-rating and leaves the shares a full leg beneath the UBS $26.50 mark of 2026-08-04 — the market declining to pay for the ramp ahead of the print. Confirmation in the other direction would be a weekly close above the low $30s with the met segment turning positive at the October report.\n\nA softer failure mode: the 2026-10-29 print comes and goes with tons in-band but costs unchanged, the story stays where it is, and mainstream coal-for-AI coverage keeps arriving without a widening bid. That would date the narrative as saturated rather than broken, and the level above still applies.\n\n## Correlation Notes\n\n- **Met-coal peers are the closest read-through.** AMR and HCC are levered to the same premium hard coking coal index that sets roughly the top of Peabody's seaborne met realizations; divergence between BTU and those two isolates Centurion execution from the commodity.\n- **The oil-levered names in the same cluster are a different driver.** HP, NOG and ARIS trade on crude and US shale activity; BTU's Q2 seaborne thermal realization of $95.87/ton and its PRB volumes respond to Newcastle/API indices, Asian power demand and US gas prices, not Brent.\n- **US gas is the direct substitution variable** for the 82.0–88.0Mt PRB guide: PRB burn competes on delivered cost against Henry Hub-linked generation, so a sustained gas break pressures the segment that the AI-power narrative rests on.\n- Queensland weather disrupts met shipments in the December–March period, and AUD/USD moves the cost line reported in dollars.",
  "first_seen": "2026-09-03",
  "last_analyzed": "2026-09-04T03:21:11+00:00",
  "last_synthesized": "2026-09-04",
  "last_update_source": "watchlist_research",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}