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Peabody Energy pops 8% as B Riley hikes price target to Street-high $37

Peabody Energy (NYSE:BTU) +8.4% to its best intraday level since April on Tuesday after B Riley reiterated a Buy rating and raised its stock price target to a Street-high $37 from $31 previously, believing the company's "seaborne met and thermal coal portfolio remains well positioned to capitalize on historically strong coal prices."

Noting Peabody (BTU) anticipates eliminating all secured debt before the end of next year, leaving the prior global surety settlement as the last impediment to capital returns, B Riley analyst Lucas Pipes said the company "remains in a strong position for enhanced financial flexibility in early 2023, including the initiation of capital returns alongside further enhancements to the company's capital structure and liability management."

"With an estimated cash position of $1.9B at year-end 2022, we see the company in a comfortable position to pay off its secured debt and defease the ARO with cash, alongside a plan for capital returns, modest organic growth outlays, and continued reclamation bonding management," Pipes wrote.

Peabody Energy (BTU) is "in a great spot to deliver long-term outperforming shareholder returns, thanks to accelerating free cash flow and falling debt level," Leo Nelissen writes in an analysis published recently on Seeking Alpha.