BTU Posts Third Straight Miss as Short Interest Climbs
Sell-side brokerages have settled on a consensus 'Hold' for Peabody Energy with a $30.75 price target, yet the coal producer has missed quarterly earnings estimates in each of its last three reporting
BTU Posts Third Straight Miss as Short Interest Climbs
NEW YORK, October 12 —
A $30.75 consensus price target sits 22.6% above where Peabody Energy Corporation (BTU) trades today, yet three straight earnings misses and 13.3% short interest suggest that sell-side patience has outlasted the fundamental story. The dispute centers on a single question: whether 12.7% revenue growth will eventually clear a 10.4% gross margin or simply accumulate losses at larger scale.
- Three consecutive earnings misses; most recent quarter: EPS -$0.41 vs. -$0.32 consensus (28.1% miss).
- $4.01B in trailing revenue growing at 12.7%, yet gross margin stands at 10.4% and free cash flow is -$54M.
- Short interest at 13.3% of float; analyst consensus Hold rating with a $30.75 price target.
The Quarter That Revenue Can't Fix
Peabody mines thermal coal for electric utilities and metallurgical coal for steelmakers through four segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, and Other U.S. Thermal, with operations spanning New South Wales, Queensland, Alabama, and Wyoming. Four quarters ago, the company beat estimates by 123.2%; every quarter since has been a miss, escalating from a 28.6% shortfall to a 375% miss when analysts expected profit and received -$0.18, then -$0.41 against -$0.32 most recently, per a July 29, 2026 8-K. That reversal from beat to worsening miss points to a cost structure expanding alongside revenue rather than using it.
Net Cash Hasn't Stopped the Shorts
With $530 million in cash against $420 million in debt, Peabody holds a net cash position of roughly $110 million, the balance-sheet strength that supports an 8.8x forward P/E and a bull-case earnings recovery best pressure-tested through a DCF model. Short sellers at 13.3% of float appear unconvinced. The equity grants to 13 executives and directors on September 3, all priced at $27.64, read as formulaic compensation rather than open-market conviction: no insider bought or sold shares in the 90-day period, and at $25.08, every recipient is immediately underwater on those grants.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| BTU | $3.1B | 8.8x | -24.8% |
| CNX | $5.1B | 9.0x | +4.3% |
| ACI | $6.1B | 6.8x | -28.1% |
| RIG | $6.3B | 19.6x | +72.2% |
| CLF | $7.4B | 13.4x | -6.1% |
| APA | $16.4B | 10.1x | +101.1% |
Gross Margin Is the Fulcrum
With institutional investors already holding 100.7% of the float, incremental share price support would come from short-covering rather than fresh allocations. The variable to watch in the next quarterly filing is gross margin: at 10.4% on $4.01 billion in revenue, the business generates positive operating cash flow of $219 million but negative free cash flow of -$54 million. A margin expansion that pushes free cash flow positive would be the clearest evidence that revenue growth is converting to earnings rather than being consumed by costs. That is the number the Hold consensus and the $30.75 target are effectively betting on. Run the free Peabody Energy Corporation deep-dive →
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
Sell-side brokerages have settled on a consensus 'Hold' for Peabody Energy with a $30.75 price target, yet the coal producer has missed quarterly earnings estimates in each of its last three reporting periods and 13.3% of its float is sold short. The two signals point in opposite directions, leaving investors to decide whether the revenue growth thesis is finally about to translate — or whether the execution record is the real story.