Chart of Day: Peabody Energy (BTU)
Coal stocks could see significant, near-term upside.
For one, as part of President Trump’s executive orders, the “president will unleash American energy by ending President Joe Biden’s policies of climate extremism, streamlining permitting, and reviewing for rescission all regulations that impose undue burdens on energy production and use, including mining and processing of non-fuel minerals,” as noted by WVNews.com.
Two, the President just declared a national energy emergency.
Not only will that be a boon for oil, but also for coal production and other natural resources. In addition, we also have to consider that electricity use will skyrocket over the next few years, especially with artificial intelligence and data centers consuming more power. All of which could help fuel further demand for coal. Plus, according to Doug Burgum, Trump’s pick for Interior Secretary, the U.S. needs to make more electricity from coal to win the AI race.
That being said, investors may want to jump into coal stocks, such as:
Peabody Energy (BTU)
After a vicious drop from about $30 to $18, BTU appears to have bottomed out. It’s also just starting to pivot higher on renewed interest in coal. Helping, analysts at BMO Capital just upgraded the BTU stock to outperform from market perform.
All after the company’s acquisition of metallurgical assets from Anglo American and ramp up of the Centurion mine in Australia, which should translate to better profitability and free cash flow over time and offer a further re-rate potential, as noted by Seeking Alpha.
Ian Cooper is an experienced trader who uses a combination of technical, fundamental, and news analysis to help individual investors grow their wealth. Ian’s Premium Options Strategies