U.S. coal stocks are poised for near-term gains as metallurgical coal prices climb on supply disruptions in China and elevated global gas prices, though Jefferies warns gains may reverse by early 2027. Chinese metallurgical coal prices jumped 10–15% in a single week, potentially lifting seaborne prices and benefiting U.S. exporters.
Jefferies has identified four U.S. coal miners as top picks, citing operational momentum, cost discipline, and favorable pricing dynamics. Warrior Met Coal leads the list with a Buy rating, supported by its premium low-volatility metallurgical coal production, net cash position, and strong cash flows. The firm projects Warrior Met’s 2027 enterprise value-to-EBITDA multiple at 4.6x and free cash flow yield at 12.2%. Second-quarter 2026 adjusted earnings reached $1.65 per share on revenue of $509.7 million, exceeding expectations.
Core Natural Resources also received a Buy rating, recognized for its cost performance and cash flow generation. The company is well-positioned to capitalize on higher metallurgical coal prices without relying on sustained increases for positive returns. Jefferies estimates its 2027 EV/EBITDA at 4.7x and free cash flow yield at 10.7%.
Peabody Energy maintained its Buy rating despite wider-than-expected second-quarter losses of $0.74 per share. Analysts note the investment case hinges on the ramp-up of the Centurion asset, with a 2027 EV/EBITDA target of 3.8x and free cash flow yield of 10.5% under that assumption. Benchmark lowered its price target to $36 while retaining the Buy rating following the results.
Ramaco Resources, categorized as a high-risk, high-reward play, also received a Buy rating. The company reported second-quarter revenue of $144.8 million, beating estimates, though it posted a loss of $0.26 per share. Jefferies projects a 2027 EV/EBITDA of 8.5x and free cash flow yield of 7.7%, contingent on higher prices supporting free cash flow.
Alpha Metallurgical Resources remains on Hold, with Jefferies citing exposure to weak high-volatility metallurgical coal markets and leveraged financials. The company missed second-quarter estimates, reporting a loss of $0.96 per share on revenue of $492.86 million.
