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Investing.com - Benchmark has reiterated a Buy rating on Core Natural Resources (NYSE:CNR) with a price target of $105.00, following the company’s third-quarter results. This target aligns with the broader analyst consensus, which remains bullish with price targets ranging from $103 to $125. According to InvestingPro data, CNR appears undervalued based on its Fair Value assessment, despite posting a significant 9.49% return over the past week.
Core Natural Resources reported third-quarter adjusted EBITDA of $141 million, exceeding the consensus estimate of $120 million. The company offset $18 million in Leer South idling costs with an initial insurance payment of $19 million related to a fire at the facility. This quarterly performance contributes to the company’s trailing twelve-month EBITDA of $495.68 million, with CNR maintaining a healthy balance sheet that holds more cash than debt.
The company trimmed its full-year coking coal sales guidance by 150,000 tons as government shutdown has delayed recovery efforts at Leer South. Idling costs for the fourth quarter are anticipated to be between $15 million and $25 million.
Core Natural Resources has increased its full-year high-CV cost per ton guidance due to challenging conditions in the new B-seam at West Elk operations. Management expects operations to resume shortly and remains optimistic about the thicker, higher-quality coal. The operational challenges align with InvestingPro data showing CNR suffers from weak gross profit margins of 18.53% and is not currently profitable, with a diluted EPS of -$0.94 over the last twelve months. Discover 10+ additional ProTips and comprehensive financial metrics with an InvestingPro subscription.
Through the third quarter, the company has returned $218 million to shareholders, representing approximately 100% of year-to-date free cash flow, exceeding its target of around 75%. Insurance and business recovery payments expected over coming quarters could total over $100 million, which will contribute to free cash flow available for shareholder returns. The company currently offers a modest dividend yield of 0.45%, while maintaining a free cash flow yield of 2% and a comfortable current ratio of 1.82, indicating liquid assets exceed short-term obligations.
In other recent news, Core Natural Resources, Inc. announced the appointment of Jimmy Brock as its new chief executive officer. Brock, who has been serving as the board chair, will take on this additional role effective immediately. He succeeds Paul A. Lang, who is stepping down from his position as CEO and board member. Lang has committed to offering transition consulting services to the company through the end of 2025. This leadership change marks a significant development for Core Natural Resources as it continues to navigate its strategic goals. The company did not provide further details on any immediate changes or strategic shifts following this appointment. Investors may look to see how Brock’s leadership will influence the company’s future direction.
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