Why Peabody Energy Stock Has Had a Roller Coaster Week So Far

By roughly midday today, shares of global coal miner Peabody Energy (NYSE: BTU) were down about 15%. But that doesn't do any justice at all to the wild price gyrations that the miner has experienced this week. On Monday, the first trading day of the span, the stock rallied over 20%. Then it swiftly turned around and began to fall. The drop was somewhat precipitous on Tuesday, but the declines have continued right through to roughly 2:30 p.m. EDT today. There's a lot to unpack.

On Oct. 18, Peabody reported preliminary results for the third quarter, which won't actually be released until Oct. 28. Investors appear to have liked what they read, since the stock rallied strongly. But the news was actually kind of mixed. For example, management expects to report adjusted EBITDA of between $280 million and $290 million, up from $95.4 million in the year-ago period.

That's great, but it also expects to post a loss of between $40 million and $60 million. Notably, it has benefited from fast-rising coal prices, but its hedging efforts have materially crimped the benefit. That said, investors appeared to be reacting to coal price moves at least as much as they were to Peabody's preliminary results.

Source Fool.com