Bear of the Day: Core Natural Resources (CNR)

Core Viewpoint - The natural resources sector has experienced a strong rally due to rising commodity prices, benefiting many companies, but not all are performing well [1] Company Summary - Core Natural Resources (CNR) is currently lagging behind its peers despite the overall commodity rally, struggling with execution, inconsistent production volumes, and declining profitability [2] - CNR's Zacks Rank is 5 (Strong Sell) due to negative earnings revisions from analysts, with the current year consensus estimate dropping from $5.37 to a loss of $1.10, and next year's estimates decreasing from $12.24 to $10.39 [3] - The company's profitability issues stem from higher input costs, operational inefficiencies, and tougher contract terms, alongside a rising debt load due to capital spending, resulting in a multi-year high debt-to-equity ratio [4] - The combination of shrinking margins and increasing debt indicates that CNR is poorly positioned in the current commodity cycle, suggesting investors should remain cautious until earnings revisions improve [5] Industry Summary - The coal industry ranks in the bottom 14% of the Zacks Industry Rank, with no stocks currently rated favorably, only two stocks holding a Zacks Rank of 3 (Hold) [6]