Shares of Peabody Energy Corp (BTU) plummeted 5.05% during Wednesday's trading session, as investors reacted to a series of negative developments surrounding the coal mining company. The sharp decline came after Benchmark lowered its target price for Peabody from $26 to $23, signaling reduced confidence in the company's near-term prospects.

Adding to the bearish sentiment, Jefferies analyst Christopher LaFemina warned that the risk of Peabody's planned takeover of Anglo American's metallurgical coal assets failing has "materially increased." LaFemina cited the collapse in metallurgical coal prices since the deal was announced and Peabody's own sharp share price decline as factors contributing to the increased uncertainty. The analyst also highlighted the potential difficulties Peabody might face in securing the necessary long-term financing, estimated at around $2 billion, in the current challenging coal market environment.

The up-to $3.78 billion deal has come under additional scrutiny following a recent fire at one of the mines Anglo American intends to sell. While a potential deal failure could be a significant negative for Anglo American, LaFemina suggested it might actually be a positive for Peabody, given the current market conditions. As investors digest these developments and reassess the risks associated with Peabody's expansion plans, the stock remains under pressure, reflecting the uncertain outlook for both the company and the broader coal industry.