NEW YORK (TheStreet) -- Shares of the private coal sector company Peabody Energy Corp. are lower by 7.38% to $6.40 in late morning trading on Wednesday, after analysts at Citigroup lowered their forecasts on coal prices. The firm reduced its price estimates on coking coal, which is used in blast furnaces to $113 a ton in 2015, a 7.4% decline from its previous estimate, Bloomberg reports. For 2016 Citigroup said coking coal will come in at $127 a ton, a 9.3% drop from its earlier forecast. Citigroup said thermal coal for 2015 will fall by 18% to $55 a ton, and that it will slide by 15% in 2016 to $64 a ton, Bloomberg noted. Exclusive Report: Jim Cramer's Best Stocks For 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Citigroup also cut its iron ore forecasts for the same time period, saying it believes iron ore will average $58 a metric ton in 2015, and $62 a ton in 2016. Citigroup's previous iron ore estimates were for $65 for both 2015 and 2016, Bloomberg added. Coal prices are feeling additional pressure due to weakening demand coming out of China, the Australian Business Review stated. Separately, TheStreet Ratings team rates PEABODY ENERGY CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: "We rate PEABODY ENERGY CORP (BTU) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 477.0% when compared to the same quarter one year ago, falling from -$26.10 million to -$150.60 million. Currently the debt-to-equity ratio of 1.67 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, BTU has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs. The gross profit margin for PEABODY ENERGY CORP is rather low; currently it is at 15.65%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.74% is significantly below that of the industry average. Net operating cash flow has decreased to $174.80 million or 17.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 60.54%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1066.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now. You can view the full analysis from the report here: BTU Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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