U.S. coal equities gained attention this week after Jefferies identified its top picks in the sector, citing a near-term rally driven by Chinese supply disruptions, elevated global gas prices and potential El Niño impacts. European gas prices have also strengthened, supporting coal demand. Analysts warned that a portion of the gains could reverse by early 2027.
Chinese metallurgical coal prices surged 10–15% in a single week, lifting valuations for U.S. producers exposed to the seaborne market. Jefferies highlighted five companies with varying degrees of leverage to the price move, assigning ratings and outlining operational and financial drivers.
Warrior Met Coal retained the top U.S. pick, rated Buy for a six-month-plus horizon. The company produces premium low-volatility metallurgical coal and benefits from a variable cost structure and organic growth at its Blue Creek mine. Warrior also carries a net cash position and strong through-cycle cash flows. For 2027, Jefferies projects an enterprise value to EBITDA multiple of 4.6x and a free cash flow yield of 12.2%. In the second quarter of 2026, Warrior reported adjusted earnings of $1.65 per share on revenue of $509.7 million, exceeding analyst expectations.
Core Natural Resources was also rated Buy, with Jefferies citing better-than-expected cost performance and cash flow in the second quarter. The company is positioned to benefit from a recovery in high-volatility metallurgical coal prices without relying on higher prices for positive cash flow and capital returns. Jefferies forecasts a 2027 EV/EBITDA of 4.7x and a free cash flow yield of 10.7%.
Peabody Energy received a Buy rating despite Jefferies noting operating risks tied to the ramp-up of its Centurion asset. Higher coal prices are expected to support the share price in the near term. For 2027, the firm projects an EV/EBITDA multiple of 3.8x and a free cash flow yield of 10.5%, assuming Centurion ramps as planned. Peabody reported a wider-than-expected second-quarter loss of $0.74 per share, missing forecasts, and saw its price target lowered to $36 while the Buy rating was maintained.
Ramaco Resources was rated Buy as a high-risk, high-reward play, with operational improvements and organic growth in metallurgical coal. Higher prices are expected to enable positive free cash flow. Jefferies projects an 8.5x EV/EBITDA multiple for 2027 and a free cash flow yield of 7.7%. The company posted mixed second-quarter results, with revenue of $144.8 million beating expectations but a loss of $0.26 per share wider than forecast.
Alpha Metallurgical Resources was the sole Hold-rated name, as Jefferies expects any price recovery to be unsustainable given the company’s high leverage to metallurgical coal price movements. The company reported a second-quarter loss of $0.96 per share on revenue of $492.86 million, missing analyst estimates on both metrics.
