HCC · Warrior Met Coal
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $94.35
Note written ·
Price against the kill line
11.7% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $94.35, on record since 11 November 2026. The shares are down 13.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $94.35, which would show the shares leading the S&P 500 again, or a fourth-quarter report with price realization above the 66% of the benchmark reported for the third quarter and sales inside the 13.0–14.0 million short ton guide.
Research onlyNot in the portfolio.
Key figures from the filings · Energy
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 508
- Revenue, change on a year (%)
- +54.6
- Gross margin (%)
- 27.4
- Operating margin (%)
- 10.0
- Free cash flow, four quarters ($M)
- 132
- Net cash, cash less debt ($M)
- 282
- Price to earnings (×)
- 19.0
- Enterprise value to sales (×)
- 2.2
All filed numbers
What Warrior Met Coal reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 508 | +54.6 | 27.4 | 10.0 |
| first filed | 510 | +71.3 | 33.3 | 18.5 |
| first filed | 459 | +52.9 | 36.7 | 17.3 |
| first filed | 384 | +29.1 | 29.5 | 9.0 |
| first filed | 329 | +0.3 | 27.1 | 6.3 |
| first filed | 298 | −25.0 | 23.9 | 2.6 |
| Pre-tax income ($M) | 48.9 |
| Net income ($M) four quarters: 232 | 49.3 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.4 |
| Operating cash flow ($M) | 363 |
| Capital spending ($M) | 230 |
| Free cash flow ($M) | 132 |
| Cash and short-term investments ($M) | 437 |
| Debt ($M) long-term debt | 155 |
| Net cash, cash less debt ($M) | 282 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 246 |
| Inventory ($M) | 215 |
| Shareholders' equity ($M) | 2,339 |
| Market value ($M) | 4,401 |
| Enterprise value, market value plus net debt ($M) | 4,119 |
| Enterprise value to sales (×) | 2.2 |
| Enterprise value to operating income (×) | 15.9 |
| Price to earnings (×) | 19.0 |
| Price to book value (×) | 1.9 |
| Free-cash-flow yield (%) | 3.0 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 8.1% of shares outstanding sold short, 7.9 days of average trading to cover, +4.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $11.6M |
| 12 monthsfrom | $0 | $24.8M |
The thesis
Warrior Met Coal's shares are more likely to lag the S&P 500 over the next three months. Its Blue Creek mine is producing far more coal and cash, but the company is paid only about 66% of the Platts Premium Low Vol (PLV) Australian benchmark price, so earnings fall short of forecasts. The fourth-quarter report decides whether 2026 sales guidance of 13.0–14.0 million short tons holds and whether realization improves.
The company's 4 November 2026 third-quarter release showed net income of $49.3 million, or $0.93 per share, on revenue of $507.9 million. Benzinga recorded the per-share result against a $1.42 estimate, and revenue against a $499.7 million estimate. Free cash flow was $138.9 million, and cash was $437.1 million at 30 September 2026.
The shares closed at $83.50 on 11 November 2026. That is 25.1% below the 52-week intraday high of $111.42 (2 September 2026), and the 3-month change in adjusted closes is −9.3%. The market has already marked the shares down for the realization shortfall, and the price now sits below both the 50-day and 200-day averages.
Bullish and bearish views on Warrior Met Coal, Inc.
The bull case on Warrior Met Coal, Inc. (HCC), in brief: volume is far above last year. The bear case: realization has not recovered.
Bull case
- Volume is far above last year. Third-quarter sales were 3.49 million short tons, up 48% year over year, and production was 3.05 million short tons, up 36% (company release, 4 November 2026). Longwall mining at Blue Creek began in November 2025, eight months ahead of schedule.
- Cash generation is strong. Third-quarter operating cash flow was $166.0 million and free cash flow was $138.9 million. Free cash flow for the first nine months was $150.4 million, and third-quarter capital spending was $27.1 million.
- Shareholders are being paid. The board declared a $2.00 per share special dividend, about $106 million, on 27 October 2026, with a 9 November 2026 record date and payment on 20 November 2026. A regular $0.08 dividend is payable on 13 November 2026.
- Guidance held. The company reaffirmed 2026 coal sales of 13.0–14.0 million short tons and production of 12.5–13.5 million short tons on 4 November 2026.
- A sell-side firm stays positive. UBS lowered its target to $97 from $98 and kept its positive rating on 5 November 2026 (Benzinga).
Bear case
- Realization has not recovered. Gross price realization was about 66% of the Platts PLV index in the third quarter, the same as the second quarter and down from 83% a year earlier. The company cited a 25% higher mix of High-Vol A coal sold into the Pacific Basin, higher freight and lower second-tier price relativities (release, 4 November 2026).
- Unit cost sits at the top of guidance. Cash cost of sales was $104.98 per short ton in the third quarter, against $100.73 a year earlier and $92.53 in the second quarter. The 2026 guide is $95–105. The company cited higher freight and royalties, lower output at Mine No. 7 and inflation, partly offset by Blue Creek and the Section 45X tax credit.
- Earnings missed forecasts. Per-share earnings of $0.93 compared with a $1.42 estimate recorded by Benzinga on 4 November 2026. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $124.0 million, or $35.54 per short ton.
- Targets are drifting lower. UBS cut its target for the second time since August, to $97 on 5 November 2026 (Benzinga).
- Insiders sold near the highs. SEC Form 4 filings show Chief Executive Officer Walter Scheller sold 50,000 shares at $110.00 on 24 August 2026 and 50,000 at $105.00 on 19 August 2026, both under a Rule 10b5-1 plan. The chief accounting officer sold 3,232 shares at $104.02 and a director sold 4,800 shares at $104.23, both on 19 August 2026. No later insider sales appear in recent filings.
- The company flags external risks. The release cites Middle East conflict-related freight and demurrage increases, vessel loading delays at the port, tariff uncertainty and inflation.
Price setup
The shares closed at $83.50 on 11 November 2026, after closes of $85.87 on 9 November 2026 and $85.45 on 10 November 2026. The closes on 4 November 2026 and 5 November 2026 were $80.92 and $80.80, the low point after the earnings release.
The 50-day average is $88.06 and the 200-day average is $87.25, both adjusted and as of 11 November 2026. The last close is under both. The 52-week intraday high is $111.42 (2 September 2026), and the 52-week closing low is $73.07 (20 November 2025).
The $2.00 special dividend went to holders of record on 9 November 2026. Adjusted closes are scaled for it, which is why the quoted and adjusted figures differ before that date. The earnings date has passed and the third-quarter 10-Q was filed on 4 November 2026, so no company report sits inside the next month.
Catalysts ahead
- 20 November 2026: Payment of the $2.00 per share special dividend. Completes the roughly $106 million cash return declared on 27 October 2026.
- ~12 February 2027 (est.): Fourth-quarter and full-year 2026 results (date unconfirmed). Shows whether 2026 sales reached the 13.0–14.0 million short ton guide and whether price realization moved above 66% of the benchmark.
Elapsed catalysts
- 13 November 2026: Payment of the regular $0.08 per share quarterly dividend. Confirms the regular dividend continues alongside the special payout. (passed)
What would change the view
A daily close above $94.35, which would show the shares leading the S&P 500 again, or a fourth-quarter report with price realization above the 66% of the benchmark reported for the third quarter and sales inside the 13.0–14.0 million short ton guide.
What it trades with
Warrior sells steelmaking coal, so its realized price follows the Platts PLV Australian benchmark and Pacific Basin freight, which the company cites in each release. The Middle East shipping disruptions and tariff uncertainty named in the 4 November 2026 release bear on freight and demurrage costs. Peer steelmaking-coal producers and global steel demand are the closest outside drivers.
The evidence, claim by claim (8)
- Third-quarter 2026 net income was $49.3 million ($0.93 per share); revenue was $507.9 million; adjusted EBITDA was $124.0 million. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Third-quarter sales were 3.49 million short tons, up 48% year over year; production was 3.05 million short tons, up 36%. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Gross price realization was about 66% of the Platts PLV Australian index, versus 83% in the third quarter of 2025. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Cash cost of sales (FOB port) was $104.98 per short ton, versus $100.73 a year earlier; the 2026 guide is $95–105. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Free cash flow was $138.9 million; cash and equivalents were $437.1 million; total liquidity was $577.6 million. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- 2026 guidance reaffirmed: coal sales 13.0–14.0 million short tons; production 12.5–13.5 million short tons. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Special dividend of $2.00 per share (about $106 million) declared; record date 9 November 2026, payment 20 November 2026. Warrior Met Coal Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- UBS lowered its HCC price target to $97 from $98 and maintained its positive rating. Benzinga analyst ratings · as of
Sources
- SEC EDGAR
- Warrior Reports Second Quarter 2026 Results · morningstar.com ·