Thursday, October 17, 2024
ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Crude oil and natural gas prices. Because ARLP has hedge-free exposure to commodity prices within its oil and gas royalty business, we revised our model to reflect updated commodity prices. We have revised our 2024 average crude oil and natural gas price estimates to $75.97 per barrel and $2.37 per Mcf, respectively, from $77.66 and $2.32. Our average 2025 crude oil and natural gas price estimates were lowered to $68.41 per barrel and $3.17 per Mcf from $71.39 and $3.22.
Updating estimates. We have trimmed our 2024 EBITDA and EPS estimates to $813.6 million and $3.60, respectively, from $816.1 million and $3.61. Our 2025 EBITDA and EPS estimates were lowered to $835.2 million and $3.43, respectively, from $841.0 million and $3.47. Beyond hedge-free exposure to crude oil and natural gas, ARLP’s ownership of bitcoin may also influence results. As of June 30, Alliance owned 452 bitcoins. On June 30, the price of a bitcoin closed at $62,678.29 compared to $63,329.50 on September 30. The bitcoin price closed at $67,640.84 on October 16. While there is a futures market, we generally do not try to predict the price of bitcoin or how many coins the partnership may sell during any given quarter.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.