Download the Complete Report Here
By Brandon Hornback
Even in the face of softer coal prices, Alliance Resource Partners, L.P. (Nasdaq: ARLP) has delivered another rock solid quarter.
ARLP’s EPS is expected to come in at $2.42 for fiscal 2025, slightly below 2024 levels, impacted by the current coal pricing challenges and expiration of higher-priced legacy contracts. Such temporary headwinds were partially offset by higher coal volumes and rigid operational discipline.
Coal volumes and contracting momentum remain strong going into 2026, clearing with way for a further pickup in growth next year. Management conservatively anticipates EPS to improve to $2.61 in fiscal 2026, driven by the successful transition at Tunnel Ridge and the accomplishment at Henderson County. Both are set to significantly improve productivity in 2026.
Speaking of operational excellence: Operating expenses decreased in the Appalachia division by 11.7% and 6.4% in the Illinois Basin. Coal production growth of 8.5% and increased sales volume of 3.9% reveal strong fundamentals and market performance. All that translates to operating leverage, with a spike in profits on the horizon as the top line improves.
At a 42% discount on P/E and 71% discount on EV/sales, the stock has plenty of room to re-rate in months ahead. In addition to improving income statement items, investors should also take comfort and a consistently robust balance sheet.
The earnings story at ARLP shapes to be an exciting one going into 2026. With strengthening domestic demand, management prioritizing efficiency and strengthening market conditions, ARLP is just waiting for a chance to show its full potential.
Download the Complete Report Here
Subscribe to our Weekly Newsletter to Receive All Research
Contact:
