Core Natural Resources, Inc. (CNR): A Bull Case Theory

We came across a bullish thesis on Core Natural Resources, Inc. (CNR) on The Coal Trader’s Substack. In this article, we will summarize the bulls’ thesis on CNR. Core Natural Resources, Inc. (CNR)’s share was trading at $71.46 as of 11^th June. CNR’s trailing P/E was 14.76 according to Yahoo Finance.

Core Natural Resources (CNR) has faced a challenging six months amid falling met and thermal coal prices, merger-related disruptions, and a costly outage at Leer South. Despite these headwinds, analysts like UBS have recently initiated coverage with a Buy rating and a price target of $80 per share, lending momentum to the stock, which has remained largely rangebound since April.

This aligns with the view that CNR offers a compelling long-term opportunity, even if near-term catalysts are limited. Notably, UBS’s endorsement struck a chord with investors because CNR stands out as the only coal producer actively repurchasing shares at the bottom of the cycle—an important signal of management’s confidence in intrinsic value. This point had previously been overlooked despite existing Buy ratings from B. Riley and Benchmark with higher targets exceeding $100 per share.

While Q1 was weak, posting negative EBITDA and free cash flow, this appears to be a temporary trough. A recovery in coal pricing, combined with the restart of Leer South, is expected to restore profitability. Management’s capital return strategy, including a planned share buyback program, further strengthens the investment case.

Moreover, one-time drags from the prior quarter—including $50 million in merger fees, $13 million in executive compensation, and over $10 million in losses tied to Leer South—will not recur, improving the outlook for future quarters.

As updated models are finalized, the early valuation math already suggests substantial free cash flow upside once market conditions normalize, supporting the case for accumulating CNR at current levels.

We previously covered a bullish thesis on Natural Resource Partners (NRP), which emphasized its royalty-driven model, lean cost structure, and 15–20% yield potential even amid depressed coal pricing. A similar long-term optimism underpins the case for Core Natural Resources (CNR), though it presents a more operationally leveraged bet. While NRP benefits from capital-light stability and downside protection, CNR offers greater upside torque tied to a recovery in met coal pricing and operational normalization at Leer South. Both reward patient capital, but CNR’s equity buybacks signal a more aggressive posture versus NRP’s predictable cash flow play.

Core Natural Resources, Inc. (CNR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held CNR at the end of the first quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of CNR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.