EBITDA beat and mining restarts put Core Natural Resources in focus

Core Natural Resources (CNR) is back on investors’ radar after reporting third quarter adjusted EBITDA of $141 million, resuming longwall mining at Leer South and clearing safety issues at Mountaineer II.

The stock has eased back from a fresh 52 week high of US$102.99 to around US$99. A 12% 1 month share price return and 23.5% 3 month share price return sit alongside a 3 year total shareholder return of about 8x, which points to momentum that has been building rather than fading, despite the more modest 1 year total shareholder return of 5.7%.

If strong EBITDA and mine restarts have you looking more closely at energy names, it could be a good moment to widen your search with aerospace and defense stocks for contrast across other capital intensive sectors.

With the stock just off a fresh high, a value score of 4, an intrinsic value estimate implying roughly a 62% discount, and a 16% gap to the average analyst target, is this a genuine opportunity or is the market already pricing in future growth?

Most Popular Narrative: 13.5% Undervalued

At a last close of $99.21 versus a narrative fair value of $114.75, Core Natural Resources sits at the center of a valuation debate built on detailed growth and margin assumptions.

Robust energy demand growth from domestic and emerging markets, most notably driven by increased power needs for AI/data centers and infrastructure expansion in Asia, are expected to create multi-year tailwinds for Core's coal products; this positions the company for sustained increases in contracted sales volumes and topline revenue.

Curious what kind of revenue runway and margin rebuild could support that fair value gap? The most followed narrative leans on ambitious earnings shifts and a future valuation multiple that might surprise you.

Result: Fair Value of $114.75 (UNDERVALUED)

However, this hinges on coal demand and operational execution, with energy transition policies or setbacks at key mines like Leer South and Itmann serving as potential spoilers for that story.

Another Angle: Revenue Multiple Paints A Different Picture

Our DCF model suggests CNR is trading at a steep discount to an estimated future cash flow value of $260.34, which contrasts with the more modest 13.5% undervaluation implied by the narrative fair value of $114.75. If both are right, what is the market missing?

Build Your Own Core Natural Resources Narrative

If this narrative does not match your view or you would rather rely on your own analysis, you can build a custom version in minutes: Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Core Natural Resources.

Looking for more investment ideas?

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• Spot potential mispricings by scanning these 873 undervalued stocks based on cash flows that combine depressed expectations with solid underlying financials.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.