Core Natural Resources completes merger with Arch Resources

Core Natural Resources, Inc., the entity formerly known as CONSOL Energy Inc (NYSE:CNX)., has completed its merger with Arch Resources, Inc., marking a significant event in the coal mining industry.

The merger, which was finalized on January 14, 2025, was described as a "merger of equals." The combined entity demonstrates strong financial health, with InvestingPro data showing a "GREAT" overall financial score and a robust EBITDA of $689 million over the last twelve months.

The company, based in Canonsburg, Pennsylvania, announced today that the audited consolidated financial statements of Arch Resources for the years ended December 31, 2024, and 2023, have been filed with the Securities and Exchange Commission (SEC). These statements are now publicly available and have been incorporated by reference into Core Natural Resources’ filings.

This business combination brings together two of the leading players in the bituminous coal and lignite mining sector under the Core Natural Resources banner.

The financial details of the merger, including the performance of Arch Resources for the past two years, are expected to provide investors and stakeholders with a clearer picture of the combined entity’s financial health and operational capacity.

As per the SEC filing, the consent of Ernst & Young LLP, the independent auditor for Arch Resources, Inc., has also been included, which is a standard procedure in such financial disclosures.

The stock of Core Natural Resources is traded on the New York Stock Exchange under the ticker symbol CNR. Currently trading near its 52-week low of $74.74, the stock has seen a challenging period with a year-to-date decline of 27%. InvestingPro analysis suggests the stock is currently undervalued, with multiple indicators pointing to potential upside.

The completion of this merger could have implications for the stock’s performance, as combined resources and potential synergies are realized.

The company maintains strong fundamentals with a P/E ratio of 5.76 and holds more cash than debt on its balance sheet. InvestingPro subscribers have access to 8 additional key insights and detailed valuation metrics that could help assess the merger’s impact on shareholder value.

In other recent news, Jefferies initiated coverage on Core Natural Resources with a Hold rating, setting a price target of $93.00. The firm provided insights into the company’s standing in the U.S. coal sector, noting its significant exposure to both the seaborne metallurgical and high-quality seaborne thermal coal markets, as well as the domestic U.S. thermal coal market.

Jefferies highlighted that Core Natural Resources’ valuation is evenly split between its metallurgical and thermal coal assets. The analysis emphasized the value of Core’s seaborne thermal coal business, particularly in the export segment. Jefferies pointed out that Core’s diversified coal exposure and relatively low-cost mines could lead to less cyclical cash flows compared to other pure-play coal miners.

The firm noted Core’s larger market capitalization and presumed greater liquidity, which might justify a premium valuation relative to peers. Despite this, Jefferies sees better value in other U.S. coal companies within their coverage at this time. The Hold rating reflects a neutral stance on the stock’s near-term performance potential.

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