ARLP Stock Forecast & Price Target

Alliance Resource Partners LP has recently increased its full-year sales guidance by 0.5 million tons, driven primarily by anticipated higher shipments from its Illinois Basin operations. Management forecasts an 8%-12% quarter-over-quarter increase in sales, despite initial delays in shipments, reflecting a robust operational performance. Furthermore, the company has successfully contracted 17.7 million tons for delivery from 2025 to 2028 and is now 96% committed for 2025, indicating strong demand and solid revenue visibility moving forward.

The financial outlook for Alliance Resource Partners LP is constrained by a downward revision of its adjusted EBITDA estimates, which has declined from $710 million to $702 million for the full year, reflecting a $4 million reduction in the second quarter alone. Furthermore, although sales were only slightly below expectations by 96,000 tons, costs per ton surpassed forecasts by nearly $6 due to diminished recoveries and adverse mining conditions, including logistical challenges associated with a longwall move at the Tunnel Ridge complex. These factors contribute to a growing concern over the company's operational efficiency and overall profitability in a challenging market environment.