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3 Coal Industry Stocks to Watch as Global Coal Demand Gains Strength
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The Zacks Coal industry is facing multiple headwinds as the use of coal in U.S. thermal power plants continues to decline. Yet, per the International Energy Agency (“IEA”), global coal demand is projected to rise 1.2% in 2026 to 8.94 billion tons (Bt), reversing earlier expectations for a decline. The upward revision mainly reflects the Middle East crisis and an unusually strong El Niño weather pattern.
Amid the expected rise in global demand for coal, despite a continuing drop in coal usage and production, investors can add stocks like Core Natural Resources, Inc. (CNR - Free Report) , Alliance Resource Partners LP (ARLP - Free Report) and Suncoke Energy (SXC - Free Report) to increase their exposure in the industry, which has been facing continuous challenges from clean energy producers, but fresh demand for thermal and coking coal is boosting their near-term prospects.
About the Coal Industry
The Zacks Coal industry consists of companies engaged in the exploration and mining of coal, which is extracted through either open-cast or underground methods. Valued for its high energy content, coal remains a key resource globally for electricity generation and the production of steel and cement. Per the EIA findings, the United States has an estimated 252 billion short tons of recoverable coal reserves, with roughly 58% classified as underground mineable. At current production levels, these reserves are expected to last for many decades. Notably, five U.S. states account for about 70% of annual coal production and 60% of coal extracted from surface mines. However, the EIA projects that coal demand will continue to decline as renewable energy adoption accelerates and coal-fired power plants are gradually retired, posing long-term challenges for the industry.
3 Trends That Could Weigh on the Coal Industry
Improvement in Global Coal Demand: Per the IEA, global coal demand is expected to rise, primarily due to hydrocarbon supply disruptions stemming from the ongoing Middle East conflicts. Lower liquefied natural gas (“LNG”) shipment volumes through the Strait of Hormuz have pushed up gas prices, increasing the competitiveness of coal. IEA also indicates stronger coal demand globally due to elevated global gas prices, which is creating fresh opportunities for the industry. Higher cooling needs and reduced hydropower generation associated with El Niño conditions have further contributed to increased coal consumption.
Despite Emissions, Coal Remains a Reliable Global Energy Source: Coal remains a widely used fuel source across the globe despite the high carbon emissions because it is relatively abundant, affordable and supported by well-established mining, transportation and power-generation infrastructure. Many developing economies continue to rely on coal to meet rapidly growing electricity demand and support industrial activity. Coal-fired plants can also provide dependable baseload power, helping maintain grid reliability when renewable generation is intermittent or when natural gas supplies are constrained or expensive, as happened with the Middle East crisis. So, if required investments are made in pollution-control technologies for coal-fired power plants, it can still support the grid.
Drop in U.S. Coal Production and Usage: Per the U.S. EIA’s projection, coal production in the United States is expected to drop to 516 million short tons (MMst) in 2026 and 497 MMst in 2027, from 528 MMst in 2025, reflecting weaker domestic power-sector demand. EIA projects coal demand from electric utilities to decline 8% in 2026 and another 6% in 2027, primarily because of increasing natural gas and renewable generation, particularly in the Northwest and MISO regions. Coal is forecasted to provide 16% of U.S. electricity generation in 2026, down from 17% in 2025, and to decline further to 14% in 2027.
Zacks Industry Rank Highlights a Solid Industry Outlook
The Zacks Coal industry is an eight-stock group within the broader Zacks Oil and Energy sector. The industry currently carries a Zacks Industry Rank #59, which places it in the top 24% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates strong performance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 24% of the Zacks-ranked industries is a result of the positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have shown confidence in this group’s earnings growth potential. Since July 2026, the coal industry’s earnings estimates for 2026 have improved 0.6% to $1.59 per share.
Before we present a few coal stocks that you may want to keep track of, let’s take a look at the industry’s recent stock market performance and valuation.
Coal Industry Underperforms the S&P 500 and the Sector
The Zacks Coal industry has underperformed the Zacks Oil and Gas sector and the Zacks S&P 500 composite over the past year.
The stocks in the coal industry have gained 14.6% compared with the Zacks Oil-Energy sector’s rally of 34.8%. The Zacks S&P 500 composite has gained 16.6% in the same time frame
One-Year Price Performance
Coal Industry's Current Valuation
Since coal companies have a lot of debt on their balance sheet, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio.
The industry is currently trading at a trailing 12-month EV/EBITDA of 10.67X compared with the Zacks S&P 500 composite’s 17.75X and the sector’s 6.04X.
In the past five years, the coal industry has traded as high as 11.65X and as low as 1.82X, with the median being 4.34X.
Enterprise Value-to EBITDA (EV/EBITDA) Ratio vs. the S&P 500
Enterprise Value-to EBITDA (EV/EBITDA) Ratio vs. the Sector
3 Coal Stocks to Add as Demand Rises
Core Natural Resources: Canonsburg, PA- based company, along with its subsidiaries, produces, markets and exports both metallurgical and thermal coal domestically and globally. The company has restarted longwall mining at its Leer South mine. Core Natural Resources has current capacity to export 27 million tons per annum (Mtpa) and nearly 90% of its export volume will be produced from the longwall mines.
The Zacks Consensus Estimate for its 2026 and 2027 earnings per share has gone up 100.8% and 9.6%, respectively, in the past 60 days. Core Natural Resources currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: CNR
Alliance Resource Partners L.P.: Tulsa, OK-based Alliance Resource Partners produces and sells coal to utilities and industrial users in the United States. The firm produces coal from several underground mining complexes, which are used to serve demand from domestic and global markets. Alliance Resource Partners is set to export 3 million tons and 2.7 million tons of coal in 2026 and 2027, respectively.
The Zacks Consensus Estimate for its 2026 and 2027 earnings per unit has gone up 4.1% and 2.5%, respectively, in the past 60 days. The firm currently has a Zacks Rank #2 (Buy).
Price and Consensus: ARLP
SunCoke Energy: Lisle, IL-based SunCoke Energy is a raw material processing and handling company serving steel and power customers, with principal businesses in coke making and logistics. Despite challenges in the broader coal industry, SXC benefits from its focus on metallurgical coal, essential for steel production. Acquired Phoenix Global assets are generating better results than SunCoke Energy’s management expectations.
The Zacks Consensus Estimate for its 2026 and 2027 earnings per share has gone up 60% and 252.6%, respectively, in the past 60 days. SunCoke Energy currently has a Zacks Rank #2.
View the Zacks #1 Rank List
Image: Bigstock
3 Coal Industry Stocks to Watch as Global Coal Demand Gains Strength
The Zacks Coal industry is facing multiple headwinds as the use of coal in U.S. thermal power plants continues to decline. Yet, per the International Energy Agency (“IEA”), global coal demand is projected to rise 1.2% in 2026 to 8.94 billion tons (Bt), reversing earlier expectations for a decline. The upward revision mainly reflects the Middle East crisis and an unusually strong El Niño weather pattern.
Amid the expected rise in global demand for coal, despite a continuing drop in coal usage and production, investors can add stocks like Core Natural Resources, Inc. (CNR - Free Report) , Alliance Resource Partners LP (ARLP - Free Report) and Suncoke Energy (SXC - Free Report) to increase their exposure in the industry, which has been facing continuous challenges from clean energy producers, but fresh demand for thermal and coking coal is boosting their near-term prospects.
About the Coal Industry
The Zacks Coal industry consists of companies engaged in the exploration and mining of coal, which is extracted through either open-cast or underground methods. Valued for its high energy content, coal remains a key resource globally for electricity generation and the production of steel and cement. Per the EIA findings, the United States has an estimated 252 billion short tons of recoverable coal reserves, with roughly 58% classified as underground mineable. At current production levels, these reserves are expected to last for many decades. Notably, five U.S. states account for about 70% of annual coal production and 60% of coal extracted from surface mines. However, the EIA projects that coal demand will continue to decline as renewable energy adoption accelerates and coal-fired power plants are gradually retired, posing long-term challenges for the industry.
3 Trends That Could Weigh on the Coal Industry
Improvement in Global Coal Demand: Per the IEA, global coal demand is expected to rise, primarily due to hydrocarbon supply disruptions stemming from the ongoing Middle East conflicts. Lower liquefied natural gas (“LNG”) shipment volumes through the Strait of Hormuz have pushed up gas prices, increasing the competitiveness of coal. IEA also indicates stronger coal demand globally due to elevated global gas prices, which is creating fresh opportunities for the industry. Higher cooling needs and reduced hydropower generation associated with El Niño conditions have further contributed to increased coal consumption.
Despite Emissions, Coal Remains a Reliable Global Energy Source: Coal remains a widely used fuel source across the globe despite the high carbon emissions because it is relatively abundant, affordable and supported by well-established mining, transportation and power-generation infrastructure. Many developing economies continue to rely on coal to meet rapidly growing electricity demand and support industrial activity. Coal-fired plants can also provide dependable baseload power, helping maintain grid reliability when renewable generation is intermittent or when natural gas supplies are constrained or expensive, as happened with the Middle East crisis. So, if required investments are made in pollution-control technologies for coal-fired power plants, it can still support the grid.
Drop in U.S. Coal Production and Usage: Per the U.S. EIA’s projection, coal production in the United States is expected to drop to 516 million short tons (MMst) in 2026 and 497 MMst in 2027, from 528 MMst in 2025, reflecting weaker domestic power-sector demand. EIA projects coal demand from electric utilities to decline 8% in 2026 and another 6% in 2027, primarily because of increasing natural gas and renewable generation, particularly in the Northwest and MISO regions. Coal is forecasted to provide 16% of U.S. electricity generation in 2026, down from 17% in 2025, and to decline further to 14% in 2027.
Zacks Industry Rank Highlights a Solid Industry Outlook
The Zacks Coal industry is an eight-stock group within the broader Zacks Oil and Energy sector. The industry currently carries a Zacks Industry Rank #59, which places it in the top 24% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates strong performance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 24% of the Zacks-ranked industries is a result of the positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have shown confidence in this group’s earnings growth potential. Since July 2026, the coal industry’s earnings estimates for 2026 have improved 0.6% to $1.59 per share.
Before we present a few coal stocks that you may want to keep track of, let’s take a look at the industry’s recent stock market performance and valuation.
Coal Industry Underperforms the S&P 500 and the Sector
The Zacks Coal industry has underperformed the Zacks Oil and Gas sector and the Zacks S&P 500 composite over the past year.
The stocks in the coal industry have gained 14.6% compared with the Zacks Oil-Energy sector’s rally of 34.8%. The Zacks S&P 500 composite has gained 16.6% in the same time frame
One-Year Price Performance
Coal Industry's Current Valuation
Since coal companies have a lot of debt on their balance sheet, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio.
The industry is currently trading at a trailing 12-month EV/EBITDA of 10.67X compared with the Zacks S&P 500 composite’s 17.75X and the sector’s 6.04X.
In the past five years, the coal industry has traded as high as 11.65X and as low as 1.82X, with the median being 4.34X.
Enterprise Value-to EBITDA (EV/EBITDA) Ratio vs. the S&P 500
Enterprise Value-to EBITDA (EV/EBITDA) Ratio vs. the Sector
3 Coal Stocks to Add as Demand Rises
Core Natural Resources: Canonsburg, PA- based company, along with its subsidiaries, produces, markets and exports both metallurgical and thermal coal domestically and globally. The company has restarted longwall mining at its Leer South mine. Core Natural Resources has current capacity to export 27 million tons per annum (Mtpa) and nearly 90% of its export volume will be produced from the longwall mines.
The Zacks Consensus Estimate for its 2026 and 2027 earnings per share has gone up 100.8% and 9.6%, respectively, in the past 60 days. Core Natural Resources currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: CNR
Alliance Resource Partners L.P.: Tulsa, OK-based Alliance Resource Partners produces and sells coal to utilities and industrial users in the United States. The firm produces coal from several underground mining complexes, which are used to serve demand from domestic and global markets. Alliance Resource Partners is set to export 3 million tons and 2.7 million tons of coal in 2026 and 2027, respectively.
The Zacks Consensus Estimate for its 2026 and 2027 earnings per unit has gone up 4.1% and 2.5%, respectively, in the past 60 days. The firm currently has a Zacks Rank #2 (Buy).
Price and Consensus: ARLP
SunCoke Energy: Lisle, IL-based SunCoke Energy is a raw material processing and handling company serving steel and power customers, with principal businesses in coke making and logistics. Despite challenges in the broader coal industry, SXC benefits from its focus on metallurgical coal, essential for steel production. Acquired Phoenix Global assets are generating better results than SunCoke Energy’s management expectations.
The Zacks Consensus Estimate for its 2026 and 2027 earnings per share has gone up 60% and 252.6%, respectively, in the past 60 days. SunCoke Energy currently has a Zacks Rank #2.
Price and Consensus: SXC