UBS has upgraded Warrior Met Coal (NYSE:HCC) from Neutral to Buy and increased its price target to $108.00 from $100.00. The new target implies upside from the stock’s recent trading level of $90.09. The share price has nonetheless experienced pressure over the last week, dropping 8.38% according to InvestingPro data, even as the name has delivered a strong 68.51% gain over the past 12 months and trades at a stretched P/E of 133.68.
In a note accompanying the move, UBS analyst George Eadie said Warrior Met appears to be at an "inflection point where returns and margins look compelling." The firm expects the company to begin delivering double-digit returns in the second half of the year as production from the Blue Creek metallurgical coal development ramps up. UBS projects saleable tons from Blue Creek in the first half of 2026 and anticipates that Warrior Met will outline a returns policy in the second half of the year, a step the bank sees as a potential catalyst for further share-price appreciation ahead of incremental growth and returns considerations for 2027 and beyond.
UBS also pointed to near-term tightness in the metallurgical coal market as a driver of upside, attributing the constrained supply environment in part to weather-related disruptions in Queensland, Australia. The firm said these conditions should provide support for stronger prices in the short term and that this market backdrop, combined with Warrior Met’s execution, could push results ahead of consensus in 2026-2027.
While UBS expects the company to issue conservative guidance for 2026 in the coming weeks, the bank highlighted additional potential sources of upside that the market may not yet be valuing, including the possibility of a second longwall at Blue Creek and higher-than-expected coal prices.
Recent operating and corporate developments
- Warrior Met reported third-quarter 2025 results that outperformed analyst expectations, with earnings per share of $0.70 versus a forecasted -$0.30, and revenue of $328.5 million compared with an anticipated $305.4 million.
- The company secured federal coal leases covering roughly 14,000 acres in Alabama, with an estimated 53.2 million short tons of recoverable coal reserves. Those leases were awarded through the Bureau of Land Management’s competitive Lease By Application process.
Separately, Moody’s Ratings moved Warrior Met Coal’s credit outlook to positive from stable, citing meaningful progress on the Blue Creek mine development. In another note included in recent coverage, UBS is reported to have raised a price target to $80 from $75 while maintaining a Neutral rating, citing improved cash cost forecasts and strong operational results. These multiple signals from ratings and research desks illustrate a period of notable activity and reassessment around the company’s trajectory.
What to watch
Key milestones to monitor include the timing and volume of saleable tons from Blue Creek in H1 2026, the company’s 2026 guidance when released, and the formal return-of-capital policy expected in H2. Outcomes on those fronts, coupled with metallurgical coal price moves, will inform whether UBS’s double-digit returns forecast and the elevated price target prove prescient.
Investors should also note the stock’s recent volatility. Despite strong year-over-year performance, the high trailing P/E signals elevated investor expectations that will need to be met by operational delivery and favorable market dynamics.