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By Rayk Riechmann
Second quarter financial results are in for REX American Resources Corp. (NYSE: REX) and consistency is the word of the hour. Disciplined execution and strategic positioning mark REX a standout player in the chronically-volatile ethanol industry.
The company has shown once again its ability to maintain margins even amid fluctuating shipping and commodity prices. The notable achievement of 20 consecutive profitable quarters is accompanied by 7% net sales growth. While net income decreased year-over-year, REX is positioned well to capitalize on strengthening regulatory and industry tailwinds with margin expansion expected in the second half.
On the operational side, both major investment initiatives are progressing well. The production expansion at The One Earth facility remains on schedule to be completed in 2026, likely increasing revenue and operational efficiency in the very-near near future. Additionally, key regulatory approvals for the carbon capture initiative are now expected to come in as early as March 2026.
Importantly, the passage of the big beautiful bill during the quarter preserves the 45Q tax credit and extends the 45Z tax credit through 2029. Both contribute meaningfully to the financial viability of the ethanol expansion and CCS projects. Combined with strong export momentum and beneficial corn supply, the macro environment looks increasingly favorable for REX.
REX’s stock price could be boosted by increased liquidity and a larger investor base following a 2-for-1 stock split, effective for recorded shareholders as of September 8th. Additionally, our peer analysis shows a potential undervaluation when considering EV/Sales and P/E multiples.
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