Brent
115$/bbl
▲ +4.5%Earnings analysis
Short take-aways from recent corporate results and commodity trends.
ONEOK: profit up 44%, but nearly a quarter of it came from a one-off tax benefit
OKE →
On 27 October ONEOK reported third-quarter 2026 results. Revenue rose 44.3% year on year to $12,455 million, adjusted EBITDA by 15.6% to $2,238 million, and net income attributable to ONEOK by 43.8% to $1,350 million. Inside that profit sits a one-off non-cash tax benefit of $336 million from the reorganisation tied to the minority equity investment; without it growth would have been markedly more modest. At an EV/EBITDA of 11.7 against its own three-year average of 13.3 the stock trades below its own history, and a 4.4% dividend yield supports the case – at the current price the share looks rather attractive.
Key takeaways
— Revenue added 44.3%, but growth decelerated from 52.8% a quarter earlier
— EBITDA rose 15.6%, while its margin compressed to 18.0% from 22.4% on higher operating costs
— Nearly a quarter of profit – $336 million – came from a one-off tax benefit, not from operations
— Adjusted EBITDA of $2,238 million includes a $53 million one-off net benefit from the minority equity and Brazos Midland transactions
— Leverage of 4.14x EBITDA is a level, not an improvement: the company extinguished nearly $5.5 billion of debt principal in September
— The $1.07 quarterly dividend gives a 4.4% yield, with $2,022 million paid over nine months
— EV/EBITDA of 11.7 is 12% below its own three-year average of 13.3 – the share is cheaper than its own history
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 8.63 | 12.5 | +44.3% |
| EBITDA | 1.94 | 2.24 | +15.6% |
| Operating profit | 1.56 | 1.57 | +0.6% |
| Net profit | 0.94 | 1.35 | +43.8% |
| Operating cash flow | 1.62 | — | — |
| Capex | 0.80 | — | — |
| EBITDA margin | 22.4% | 18.0% | -4.4 pp |
| Net margin | 10.9% | 10.8% | -0.1 pp |
Revenue added 44.3%, but growth decelerated from 52.8% a quarter earlier
Third-quarter 2026 revenue was $12,455 million, 44.3% above the year-earlier level. That is a strong result, but it is more modest than the previous quarter's growth: in the second quarter revenue was adding 52.8%, so the pace has decelerated.
Volumes were the main driver. NGL raw feed throughput rose 6%, including a 16% increase in the Gulf Coast/Permian region; refined products shipped rose 6%, and Permian natural gas processed rose 4%. The company directly attributes the result to higher Permian Basin volumes and system integration.
By segment, Refined Products and Crude grew most: segment adjusted EBITDA rose to $685 million from $582 million a year earlier. Natural Gas Pipelines added to $231 million from $200 million on optimisation and marketing around the Waha Hub–Katy price spread. NGL and Gathering and Processing stayed roughly flat – $718 million versus $748 million and $563 million versus $566 million respectively.
EBITDA rose 15.6%, while its margin compressed to 18.0% from 22.4% on higher operating costs
Adjusted EBITDA was $2,238 million, 15.6% above the year-earlier level. There is growth, but it is three times slower than revenue growth, and that fed straight into the margin: the EBITDA margin fell to 18.0% from 22.4%.
The cause is operating costs. Company-wide they rose to $861 million from $738 million. In the NGL segment costs rose by $27 million, including $20 million of higher outside services and $7 million of higher employee-related costs tied to expanding operations. Refined Products and Crude costs rose $18 million, Gathering and Processing $19 million.
Cost of sales and fuel increased to $9,612 million from $5,962 million – faster than revenue, which is typical for a model with growing commodity volumes. The net margin was almost unchanged at 10.8% versus 10.9%, but only because it was supported by the one-off tax effect discussed below.
Nearly a quarter of profit – $336 million – came from a one-off tax benefit, not from operations
Net income attributable to ONEOK was $1,350 million, or $2.13 per diluted share, against $939 million and $1.49 a year earlier. Growth of 43.8% looks impressive, but inside it sits a one-off non-cash tax benefit of $336 million, or $0.53 per share, from the ONEOK, Inc. reorganisation tied to the minority equity investment.
Without that effect profit would have been markedly lower. Operating income, which does not depend on tax, rose only to $1,568 million from $1,558 million – essentially flat. That means the entire increase at the net line came from tax and lower interest expense, not from operating leverage.
Interest expense fell to $415 million from $450 million as the company repaid part of its debt. But here too there is a one-off element: adjusted EBITDA includes a $53 million net benefit from the minority equity and Brazos Midland transactions, mainly corporate gains on debt extinguishment partly offset by costs.
Adjusted EBITDA of $2,238 million includes a $53 million one-off net benefit from the minority equity and Brazos Midland transactions
The release states directly that third-quarter adjusted EBITDA includes a $53 million net benefit from the minority equity and Brazos Midland transactions. This is mainly corporate gains on debt extinguishment, partly offset by transaction costs. Without them the figure would have been about $2,185 million.
For comparison, a year earlier third-quarter EBITDA included $22 million of corporate gains on debt extinguishment. The one-off element has thus more than doubled, and it is part of the explanation for the 15.6% EBITDA growth.
The company completed the acquisition of Brazos Midstream's Permian Midland Basin assets and expects a contribution of about $75 million in 2026, of which roughly $50 million should show up in adjusted EBITDA net of transaction costs. That is acquisition effect, not organic growth.
Leverage of 4.14x EBITDA is a level, not an improvement: the company extinguished nearly $5.5 billion of debt principal in September
Net debt at the latest annual balance sheet was $32,975 million, and the ratio of net debt to trailing-twelve-month EBITDA was 4.14. That is a leverage level, and it remains high for an infrastructure company, though below many issuers with a comparable rating.
In September 2026 ONEOK extinguished nearly $5.5 billion of debt principal. The 30 September balance sheet shows long-term debt of $26,935 million against $30,755 million at end-2025, and short-term borrowings down to $85 million from $820 million. At the same time the company completed a $9 billion minority equity investment, lifting noncontrolling interests in equity to $9,144 million.
Interest expense for nine months fell to $1,288 million from $1,330 million. That is modest, but with the September repayment the full effect on interest expense will show in the fourth quarter and in 2027. Rating agencies S&P Global Ratings and Fitch upgraded ONEOK to BBB+.
The $1.07 quarterly dividend gives a 4.4% yield, with $2,022 million paid over nine months
In October 2026 ONEOK declared a quarterly dividend of $1.07 per share, or $4.28 annualised. At the pre-release closing price of $96.36 that gives a 4.4% yield on trailing-twelve-month payments.
Over nine months of 2026 the company paid $2,022 million of dividends against $1,935 million a year earlier. With nine-month net income attributable to ONEOK of $3,090 million, payments are about two-thirds of profit. That is a high payout ratio, sustained in part by one-off tax effects that lift profit but not cash flow.
Our estimate: at the current price and with the quarterly dividend held at $1.07, the annual yield will stay around 4.4%. It rests on profit that in 2026 is supported by the $336 million one-off tax benefit and gains on debt extinguishment. If those effects do not repeat, the payout ratio will rise, and that is the main risk to the dividend. A 4.4% yield is well above most infrastructure companies, but leverage of 4.14x EBITDA limits room to raise it.
EV/EBITDA of 11.7 is 12% below its own three-year average of 13.3 – the share is cheaper than its own history
On the trailing-twelve-month EV/EBITDA multiple the share trades at 11.7 against its own three-year average of 13.3, i.e. 12% below its own history. That is the only valid comparison: we do not compare it with a sector or peers, as no such data is in the facts.
The trailing-twelve-month P/E is 14.9 and return on equity is 17.1%. At the pre-release price of $96.36 and a market capitalisation of $60,458 million, the market values the company below its own average multiple, which partly reflects high leverage and the one-off nature of part of the profit.
On the portal's model, repricing EBITDA to current commodity prices at the target EV/EBITDA puts the upside of the share to its model fair value at +33%. That is our own estimate, not a market consensus and not a target price. The market reaction to the release was muted: the share lost 0.4% on the release day and was at the same level from then to 27 October.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 60.5 bn USD |
| P/E (LTM) | 14.9 |
| EV/EBITDA (LTM) | 11.7 |
| P/B | 2.69 |
| Net debt / EBITDA (LTM) | 4.14 |
| ROE | 17.1% |
| Dividend yield (12m) | 4.4% |
| EV/EBITDA, 3-year average | 13.3 |
Bottom line
The strong part of the release is revenue and volumes: 44.3% growth and record Permian Basin volumes. But profit growth of 43.8% came mainly from the $336 million one-off tax benefit and gains on debt extinguishment, while operating income was almost flat year on year. The EBITDA margin compressed to 18.0% from 22.4%, a direct consequence of higher costs. At 11.7 times EV/EBITDA against its own three-year average of 13.3 and a 4.4% yield, the share is cheaper than its own history, but leverage of 4.14x EBITDA and the one-off nature of part of the profit limit re-rating. The verdict is rather attractive: the discount to its own history and the dividend outweigh, but confirmation needs a quarter without one-offs and with margin recovery.
Baker Hughes: revenue accelerated to +14.5% on the Chart acquisition, but net income fell by a third on one-off costs
BKR →
On October 27, Baker Hughes reported third-quarter 2026 results. Revenue reached $8,025 million, up 14.5% year over year after a 2.4% decline in the prior quarter, adjusted EBITDA rose 28.3% to $1,415 million, while net income fell 32.5% to $411 million on Chart transaction costs and amortisation of acquired intangibles. The stock trades at 25.6 times trailing earnings and 11.6 times trailing EBITDA, the dividend yield is 1.6%, and the portal model implies 21% upside to fair value. With a record order backlog and accelerating revenue, the share looks rather attractive, though the gap between adjusted and net income needs checking in the next report.
Key takeaways
— Revenue accelerated to +14.5% year over year, with almost all the gain coming from the Chart acquisition
— Adjusted EBITDA rose 28.3%, but net income fell 32.5% on one-off costs
— A record order backlog of $46.4 billion secures revenue for years ahead
— Debt rose to $18.3 billion after the $14.2 billion deal, but cash covers almost a quarter
— Free cash flow of $769 million covers the dividend with room to spare
— The 1.6% dividend yield is modest against the policy rate, but the payout is protected by cash flow
— At 11.6 times EBITDA and 25.6 times earnings, there is room for re-rating if order growth holds
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 7.01 | 8.03 | +14.5% |
| EBITDA | 1.10 | 1.42 | +28.3% |
| Operating profit | 0.82 | — | — |
| Net profit | 0.61 | 0.41 | -32.5% |
| Operating cash flow | 0.93 | 1.00 | +8.2% |
| Capex | 0.29 | — | — |
| EBITDA margin | 15.7% | 17.6% | +1.9 pp |
| Net margin | 8.7% | 5.1% | -3.6 pp |
Revenue accelerated to +14.5% year over year, with almost all the gain coming from the Chart acquisition
Revenue in the third quarter of 2026 reached $8,025 million, up 14.5% year over year after a 2.4% decline in the second quarter. The acceleration came almost entirely from consolidating Chart from July 16: the segment contributed $888 million of revenue, or about 87% of the full year-over-year increase of $1,015 million. Without Chart, revenue would have grown roughly 2%, in line with the prior quarters.
Organic growth came from Oilfield Services & Equipment and Industrial & Energy Technology. OFSE revenue rose 1% year over year to $3,660 million, IET – 3% to $3,477 million. Within IET, gas technology equipment fell 7% on the disposal of Precision Sensors & Instrumentation, while gas technology services grew 12%. OFSE geography shifted toward Europe, CIS and Africa, where revenue rose 29%, while the Middle East and Asia declined 13%.
The order backlog rose to $46.4 billion, of which $39.4 billion is in IET. Quarterly orders were $10.8 billion, a book-to-bill ratio of 1.3. This means the company is loaded with orders for several years ahead, and the current revenue acceleration is not a one-off spike but the start of converting the accumulated backlog.
Adjusted EBITDA rose 28.3%, but net income fell 32.5% on one-off costs
Adjusted EBITDA in the third quarter was $1,415 million, 28.3% above the year-earlier level. The EBITDA margin rose to 17.6% from 15.7%. Growth came from the Chart contribution, higher prices and cost-out initiatives, partly offset by inflation and a change in business mix.
GAAP net income fell 32.5% to $411 million, and the net margin dropped to 5.1% from 8.7%. The gap is explained by one-off items: Chart transaction costs of $158 million, amortisation of acquired intangibles of $143 million, inventory step-up charges of $25 million, and restructuring of $28 million. Adjusted net income rose 2% to $695 million, and adjusted earnings per share were $0.70 versus $0.68 a year earlier.
The $284 million gap between adjusted and net income is the price of integrating Chart. As the deal is completed, these costs will disappear and net income will converge with adjusted income. For now, the market sees a one-third drop in profit, which explains the cautious reaction despite strong operating metrics.
A record order backlog of $46.4 billion secures revenue for years ahead
The order backlog rose to $46.4 billion, up $6.4 billion in the quarter. IET accounted for $39.4 billion, of which $16.5 billion is gas technology equipment and $16.8 billion is services. Chart added $3.6 billion. This backlog covers more than five quarters of current revenue and provides high visibility for 2027–2028.
Quarterly orders of $10.8 billion were the second-largest in IET's history. The company raised its full-year IET order guidance and its 2026–2028 Horizon 2 outlook to $50 billion plus. Drivers are data centres, space, LNG and gas infrastructure. Major contracts include 1.1 GW of gas turbines for a U.S. technology company and orders for Venture Global's Plaquemines project.
The record backlog reduces the risk of a revenue slowdown even if current orders temporarily dip. However, converting orders into revenue and cash depends on execution timelines and may stretch over several years. For an investor, this means the current valuation should rest on the company's ability to deliver contracts on time, not on one-off order spikes.
Debt rose to $18.3 billion after the $14.2 billion deal, but cash covers almost a quarter
Net debt at the end of the third quarter was $18.3 billion versus $5.4 billion at the end of 2025. The increase reflects the $14.2 billion Chart acquisition, financed by $11.9 billion of long-term bond issuance and own cash. Cash and equivalents were $4.1 billion, covering about 22% of gross debt.
Interest expense rose to $177 million for the quarter versus $56 million a year earlier, reflecting servicing of the new debt. With trailing twelve-month EBITDA of $5.1 billion, the net debt to EBITDA ratio is about 3.6 – higher than before the deal but still manageable for a company with a record order backlog. Operating cash flow for the quarter was $1,005 million, enough to service debt without strain.
Leverage is the main risk after the deal. If cash flow stays at $3.6 billion on a trailing twelve-month basis, the company can reduce debt by about $1 billion a year after dividends. However, further acquisitions or a slowdown in converting orders into cash could require additional financing.
Free cash flow of $769 million covers the dividend with room to spare
Operating cash flow in the third quarter was $1,005 million, and free cash flow was $769 million after capital expenditures of $236 million. On a trailing twelve-month basis, operating cash flow was $3,583 million, enough to cover dividends of $228 million per quarter and capital expenditures. The company maintains discipline: capex remains around 3% of revenue.
The quarterly dividend was $0.23 per share, unchanged from a year earlier. With an annual payout of $0.92 and a price of $56, the dividend yield is 1.6%. This is modest against current rates, but the payout is protected by cash flow: free cash flow coverage exceeds 3 times. The company did not cut the dividend even during the Chart integration.
Free cash flow remains positive after the deal despite higher interest expense. This is an important signal: the company can simultaneously service debt, pay dividends and invest in growth. If the flow holds, management has room for further debt reduction or higher payouts.
The 1.6% dividend yield is modest against the policy rate, but the payout is protected by cash flow
The latest payment was $0.23 per share for the third quarter of 2026, $0.92 for the year. At a price of $56, the yield is 1.6%. This is below many oil and gas sector names and well below the current policy rate. However, stability of the payout matters more than size: the company pays quarterly and did not cut the dividend during the Chart integration.
Our estimate for the 2026 dividend is $0.92 per share, flat on last year. The payout rests on adjusted net income of $2,289 million over the trailing twelve months and free cash flow of $3,583 million. The payout ratio to free cash flow is about 25%, leaving a margin of safety. The risk of a cut is low as long as cash flow remains positive.
A 1.6% yield is not the main argument for the stock. For a dividend-focused investor, the name may look less attractive than fixed-income instruments. However, combined with revenue and backlog growth, the dividend is a pleasant addition rather than the basis of the investment case.
At 11.6 times EBITDA and 25.6 times earnings, there is room for re-rating if order growth holds
The stock trades at 11.6 times EV/EBITDA and 25.6 times P/E on a trailing twelve-month basis. Return on equity is 13.9%. For a company with a record order backlog and accelerating revenue, these multiples look moderate. The portal model values fair value at 21% upside to the current price, reflecting a re-pricing of EBITDA at current commodity prices.
A comparison of the current multiple with its own three-year history is not possible – the FACTS contain no averages. However, relative to revenue growth of 14.5% and EBITDA growth of 28.3%, the valuation does not look stretched. The market, judging by the reaction to the report (+5.3% on the publication day and +5.3% since), is gradually acknowledging the strength of operating results.
The main risk to the valuation is the gap between adjusted and net income. If one-off Chart integration costs prove prolonged, P/E will stay high and the discount to fair value will not materialise. Conversely, completing the integration and growing cash flow could lead to a re-rating toward the portal model.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 58.6 bn USD |
| P/E (LTM) | 25.6 |
| EV/EBITDA (LTM) | 11.6 |
| Operating cash flow (LTM) | 3.58 bn |
| ROE | 13.9% |
| Dividend yield (12m) | 1.6% |
Bottom line
The strong side of the report is revenue acceleration to 14.5% and a record order backlog of $46.4 billion, which provides visibility for years ahead. The weak side is the 32.5% drop in net income on one-off Chart integration costs, and the rise in debt to $18.3 billion. The 1.6% dividend is protected by cash flow but is not the main argument. At 11.6 times EBITDA and 25.6 times earnings, there is room for re-rating if the company completes the integration and sustains order growth. The verdict is rather attractive: operating results are strong, but the gap between adjusted and net income needs confirmation in the next quarter.
Expand Energy: revenue accelerated to +10.8%, but EBITDA margin compressed by almost 7 points
EXE →
On 27 October Expand Energy reported results for the third quarter of 2026. Revenue came in at USD 3,286 mn, up 10.8% year on year after a 19.8% decline a quarter earlier; EBITDA was USD 1,390 mn and net profit USD 519 mn. Revenue growth resumed, but EBITDA and net profit fell 5.2% and 5.1% respectively, and the EBITDA margin compressed to 42.3% from 49.4% a year earlier. At an EV/EBITDA of 4.2 against its own three-year average of 4.9 and a portal-model upside of +16%, the share looks rather attractive, though the margin compression keeps us from a higher rating.
Key takeaways
— Revenue accelerated to +10.8% year on year after a 19.8% decline a quarter earlier
— EBITDA fell 5.2% and its margin compressed to 42.3% from 49.4% a year earlier
— Net profit declined 5.1% to USD 519 mn at a 15.8% net margin
— Operating cash flow of USD 1,177 mn covered capital expenditure of USD 838 mn with room to spare
— Net debt rose from USD 3.1 bn on 30 June to USD 4.5 bn on 30 September
— Trailing twelve-month dividend yield is 2.4%, with payouts still funded from operating cash flow
— EV/EBITDA of 4.2 is below its own three-year average of 4.9, and the portal model implies +16% upside
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 2.97 | 3.29 | +10.8% |
| EBITDA | 1.47 | 1.39 | -5.2% |
| Operating profit | 0.72 | 0.64 | -11.7% |
| Net profit | 0.55 | 0.52 | -5.1% |
| Operating cash flow | 1.20 | 1.18 | -2.0% |
| Capex | 0.78 | 0.84 | +8.1% |
| EBITDA margin | 49.4% | 42.3% | -7.1 pp |
| Net margin | 18.4% | 15.8% | -2.6 pp |
Revenue accelerated to +10.8% year on year after a 19.8% decline a quarter earlier
In the third quarter of 2026 Expand Energy's revenue reached USD 3,286 mn, 10.8% above the same quarter a year earlier. A quarter earlier, in Q2 2026, revenue was declining 19.8% year on year, so the direction reversed – growth accelerated.
Sequentially, revenue rose from USD 2,960 mn in Q2 to USD 3,286 mn in Q3. This is a recovery from a weak second quarter, but the absolute level is still below the peak of Q1 2026, when revenue reached USD 4,397 mn.
For durability, it matters that revenue has grown year on year for two consecutive quarters after the slump in late 2025 – early 2026. However, the year-earlier base in Q3 2025 was low, and without data on realised prices and production volumes we cannot say the growth is organic rather than one-off.
EBITDA fell 5.2% and its margin compressed to 42.3% from 49.4% a year earlier
EBITDA for Q3 2026 was USD 1,390 mn, 5.2% below the level of Q3 2025. With revenue up 10.8%, this means costs grew faster than revenue, and the EBITDA margin compressed to 42.3% from 49.4% a year earlier – almost 7 percentage points.
Operating profit in the reported quarter was USD 640 mn versus USD 725 mn a year earlier. A decline in operating profit alongside revenue growth points to higher operating costs, but the facts provide no line-item breakdown, so the specific cause of the margin compression cannot be named.
The margin compression is the main negative of the report. If it reflects one-off factors, the margin may recover next quarter; if it is a consequence of rising unit costs, pressure on profit will persist. For an investor, the key question is the durability of the margin above 40%.
Net profit declined 5.1% to USD 519 mn at a 15.8% net margin
Net profit for Q3 2026 was USD 519 mn, down 5.1% year on year. The net margin narrowed to 15.8% from 18.4% a year earlier, consistent with the compression in the operating margin.
Over the trailing twelve months net profit was USD 2,753 mn on revenue of USD 13,900 mn and EBITDA of USD 6,513.7 mn. These figures reflect the stronger first and second quarters of 2026 and should not be applied to the reported quarter.
The decline in profit alongside revenue growth confirms that the main risk in the report is costs, not revenue. Net profit remains positive and covers dividend payments, but its dynamics are worse than those of revenue.
Operating cash flow of USD 1,177 mn covered capital expenditure of USD 838 mn with room to spare
Operating cash flow for Q3 2026 was USD 1,177 mn, capital expenditure – USD 838 mn. Free cash flow therefore remains positive at roughly USD 339 mn before interest and taxes.
Over the trailing twelve months operating cash flow was USD 5,631 mn, with capital expenditure in the reported quarter higher than in the previous one (USD 838 mn versus USD 753 mn in Q2). The increase in capex may be tied to seasonal work, but the facts do not disclose the reason.
Positive free cash flow is important for funding dividends and reducing debt. However, rising capital expenditure and higher net debt suggest that free cash flow is fully absorbed by investment and payouts.
Net debt rose from USD 3.1 bn on 30 June to USD 4.5 bn on 30 September
Net debt as of 30 September 2026 was USD 4,514 mn, up from USD 3,065 mn on 30 June 2026 – an increase of USD 1.4 bn over the quarter. A year earlier, on 30 September 2025, net debt was USD 4,460 mn, so over twelve months it was almost unchanged.
The ratio of net debt to trailing twelve-month EBITDA is 0.69 – a level that remains comfortable for the company. The direction of change in this ratio is not disclosed in the facts, so we state the level only.
The increase in debt in Q3 is partly explained by seasonal capital expenditure and dividend payments. With positive operating cash flow the company can service its debt, but further debt growth without EBITDA growth could limit financial flexibility.
Trailing twelve-month dividend yield is 2.4%, with payouts still funded from operating cash flow
Expand Energy's trailing twelve-month dividend yield is 2.4%. The company pays dividends, and current quarterly operating cash flow of USD 1,177 mn covers both capital expenditure and payouts.
Our estimate for the 2026 dividend assumes the current yield of about 2.4% is maintained at a share price of USD 94.02. This implies the company will keep the current payout level, which rests on profit and cash flow. However, with margin compression and rising debt, the sustainability of payouts depends on EBITDA recovery.
A yield of 2.4% is modest relative to the risk-free rate, but for a commodity company with cyclical earnings it reflects a cautious approach to capital allocation. A cut is possible if EBITDA falls further or capital expenditure rises.
EV/EBITDA of 4.2 is below its own three-year average of 4.9, and the portal model implies +16% upside
The trailing twelve-month EV/EBITDA multiple is 4.2 against its own three-year average of 4.9 – the share trades 15% below its historical valuation. The trailing P/E is 8.2, also pointing to a modest valuation.
On the portal's model, which re-prices EBITDA at current commodity prices at the target EV/EBITDA, the upside to fair value is +16%. This is our own estimate, not a market consensus.
The market reaction to the report was muted: the share added 0.6% on the release day, and from the release to 27 October the gain was also 0.6%. Investors appear to have weighed the margin compression, but the low valuation limits downside.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 22.6 bn USD |
| P/E (LTM) | 8.2 |
| EV/EBITDA (LTM) | 4.2 |
| P/B | 1.22 |
| Net debt / EBITDA (LTM) | 0.69 |
| Operating cash flow (LTM) | 5.63 bn |
| ROE | 3.6% |
| Dividend yield (12m) | 2.4% |
| EV/EBITDA, 3-year average | 4.9 |
Tracked metrics of the idea
The metrics we track our idea "Expand Energy, US gas producers" of 2026-07-24 by - at the idea date and now. The share price moved +3% over the period. Original write-up: https://frontier.eninvs.com/region/commodities/article/natgas
Idea: at publication and now
| Metric | 2026-07-24, price 91.52 | Now, price 94.62 |
|---|---|---|
| Fundamental value created, share of market cap | +25% | -9% |
| Upside on the commodity model (conservative price: midpoint of spot and 3-year average) | +10% | +16% |
Bottom line
The strong side of the report is the resumption of revenue growth to +10.8% year on year and positive free cash flow. The weak side is the compression of the EBITDA margin to 42.3% and the 5.1% decline in profit. Net debt rose over the quarter but remains moderate relative to EBITDA. The valuation is below its own history, and the portal model implies +16% upside, which outweighs the margin negative. Verdict – rather attractive: the low multiple and resilient cash flow offset the margin risk, but a re-rating requires evidence of margin recovery.
Freeport-McMoRan: revenue accelerated to +8.2%, but profit lagged behind
FCX →
Freeport-McMoRan reported results for the third quarter of 2026. Revenue came in at $7,546 million, operating profit at $2,353 million, and net profit at $1,174 million. Year-on-year revenue growth accelerated to +8.2% after a decline of 8.8% a quarter earlier, yet net profit fell 5.9% and the net margin slipped to 15.6% from 17.9%. At the current price the share looks rather unattractive: the EV/EBITDA multiple of 11.1x is 41% above its own three-year average, and the portal's model implies a downside of 37%.
Key takeaways
— Revenue rose 8.2% year on year, an acceleration after a decline of 8.8% a quarter earlier
— Net profit fell 5.9%, and the net margin dropped to 15.6% from 17.9%
— Operating profit of $2,353 million exceeded last year's $1,972 million, but net profit did not hold that level
— Operating cash flow of $1,981 million exceeded net profit, but capital expenditure for the period is not disclosed
— Leverage at 0.73x LTM EBITDA remains moderate
— A dividend yield of 0.9% barely offsets the re-rating risk
— EV/EBITDA of 11.1x is 41% above its own three-year average of 7.9x
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 6.97 | 7.55 | +8.2% |
| EBITDA | 2.60 | — | — |
| Operating profit | 1.97 | 2.35 | +19.3% |
| Net profit | 1.25 | 1.17 | -5.9% |
| Operating cash flow | 1.66 | 1.98 | +19.1% |
| Capex | 1.06 | — | — |
| EBITDA margin | 37.2% | — | — |
| Net margin | 17.9% | 15.6% | -2.3 pp |
Revenue rose 8.2% year on year, an acceleration after a decline of 8.8% a quarter earlier
In the third quarter of 2026, revenue reached $7,546 million, up 8.2% year on year. In the second quarter the dynamic was negative at minus 8.8%, so the current growth marks a reversal. The acceleration was driven primarily by copper: revenue added more than $600 million quarter on quarter.
For a commodity producer, such a reversal is sensitive to the metal price. The report does not disclose how much of the growth came from volume versus price, so the durability of the improvement cannot yet be assessed. The next quarter will show whether this was a one-off price spike or the start of a cycle.
Net profit fell 5.9%, and the net margin dropped to 15.6% from 17.9%
Net profit for the third quarter of 2026 was $1,174 million versus $1,247 million a year earlier, a decline of 5.9%. The net margin fell to 15.6% from 17.9%. This happened despite revenue growth, meaning costs or tax charges rose faster than income.
Operating profit, by contrast, increased to $2,353 million from $1,972 million, so the pressure on the bottom line arose below the operating line. The report does not detail what exactly ate into profit – interest expense, taxes, or one-off items. Without that, it is impossible to say whether this is a one-off or a new normal.
Operating profit of $2,353 million exceeded last year's $1,972 million, but net profit did not hold that level
Operating profit rose to $2,353 million from $1,972 million a year earlier. This means the company is operating better than a year ago, and revenue growth is converting into profit before interest and taxes. Yet net profit declined, and the gap between the two lines points to higher financial or tax costs.
The report does not disclose the structure of this gap. For an investor, what matters is that operating efficiency did not deteriorate, and the weakness is concentrated below the operating line. If the pressure stems from one-off items, net profit could recover as early as next quarter.
Operating cash flow of $1,981 million exceeded net profit, but capital expenditure for the period is not disclosed
Operating cash flow for the third quarter of 2026 was $1,981 million, above net profit of $1,174 million. This means the company generates cash faster than it books profit, typically through depreciation and working capital changes. Over the trailing twelve months, operating cash flow reached $6,217 million.
Capital expenditure for the reporting quarter is not disclosed in the facts, so free cash flow cannot be assessed. In prior quarters, capex was significant – for example, $1,104 million in the second quarter of 2026. Without this figure, it is impossible to judge how much cash remains for dividends and debt reduction.
Leverage at 0.73x LTM EBITDA remains moderate
Net debt at the latest balance sheet date was $6,668 million, and the ratio of net debt to trailing twelve-month EBITDA was 0.73. This is a moderate level for a commodity company, leaving room to manoeuvre if metal prices fall.
The direction of change in this ratio is not disclosed in the facts, so it cannot be claimed that leverage is rising or falling. All that is known is that absolute net debt of $6,668 million is comparable to trailing twelve-month EBITDA of $9,105 million. Such a cushion matters if revenue turns down again.
A dividend yield of 0.9% barely offsets the re-rating risk
The trailing twelve-month dividend yield is 0.9%. This is a modest level that provides little support for the share. At the current price, the dividend covers only a small fraction of what an investor could earn from risk-free instruments.
The facts do not include the current-year payout or the dividend policy, so the sustainability of the payment cannot be assessed. If profit continues to decline while capital expenditure remains high, the dividend could be revised. For a commodity company with cyclical revenue, this is an additional risk.
EV/EBITDA of 11.1x is 41% above its own three-year average of 7.9x
The trailing twelve-month EV/EBITDA multiple is 11.1x, while its own three-year average is 7.9x. The share trades 41% above where it has typically been over the past three years. This means the market has already priced in a profit recovery that is not yet visible in the report.
The portal's model, which re-prices EBITDA at current commodity prices at the target multiple, implies a downside of 37% to the current market capitalisation. This is not a consensus but our own estimate, and it points to overvaluation. For comparison, the trailing twelve-month P/E is 23.0 – also not cheap for a company with falling net profit.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 94.5 bn USD |
| P/E (LTM) | 23.0 |
| EV/EBITDA (LTM) | 11.1 |
| P/B | 5.00 |
| Net debt / EBITDA (LTM) | 0.73 |
| Operating cash flow (LTM) | 6.22 bn |
| ROE | 19.9% |
| Dividend yield (12m) | 0.9% |
| EV/EBITDA, 3-year average | 7.9 |
Bottom line
The strong point of the report was the revenue reversal: growth of 8.2% after a decline of 8.8% a quarter earlier, and operating profit rising to $2,353 million. However, net profit fell 5.9% and the margin dropped to 15.6% – the operating success did not reach the bottom line. Leverage at 0.73x EBITDA remains moderate, but a dividend yield of 0.9% provides no support. The key question for a holder is whether the current valuation of 11.1x EBITDA against a three-year average of 7.9x and a 37% downside on the portal's model is justified. The verdict is rather unattractive.
Zijin Mining: a 35.1% margin holds, but revenue has slowed for a third straight quarter
ZIJIN →On 23 October Zijin Mining reported third-quarter 2026 results: revenue of USD 13,246.8 mn, EBITDA of USD 4,648.3 mn and net profit of USD 2,723.7 mn. The EBITDA margin was 35.1% and the net margin 20.6%, while net debt at the end of September stood at USD 7.7 bn, or 0.58x trailing-twelve-month EBITDA. The stock trades at 9.3x EV/EBITDA against its own three-year average of 11.1, and at the current price it looks rather attractive, although slowing revenue and the portal model's negative reading keep the rating from going higher.
Key takeaways
— Third-quarter revenue of USD 13,246.8 mn is below the two prior quarters, and year-on-year growth slowed from 30.8% in the first quarter to 14.0% in the second
— EBITDA of USD 4,648.3 mn gives a 35.1% margin – above 34% for a second straight quarter and the best level in five quarters
— Net profit of USD 2,723.7 mn at a 20.6% net margin holds close to the second quarter even as revenue fell over the same period
— Net debt rose from USD 6.9 bn on 30 June to USD 7.7 bn on 30 September but fell from USD 15.5 bn a year earlier – the ratio to LTM EBITDA is 0.58
— Trailing-twelve-month dividend yield is 3.3%, with payouts funded from profit rather than debt
— The stock trades at 9.3x EV/EBITDA against its own three-year average of 11.1 – 17% below its history, with P/E LTM at 15.4 and ROE at 11.7%
— On the portal's model the share is priced 10% above fair value if EBITDA is re-priced at current commodity prices
Attractiveness
Key figures, USD bn
| Metric | — | Q3 2026 | Change |
|---|---|---|---|
| Revenue | — | 13.2 | — |
| EBITDA | — | 4.65 | — |
| Operating profit | — | 4.32 | — |
| Net profit | — | 2.72 | — |
| EBITDA margin | — | 35.1% | — |
| Net margin | — | 20.6% | — |
Third-quarter revenue of USD 13,246.8 mn is below the two prior quarters, and year-on-year growth slowed from 30.8% in the first quarter to 14.0% in the second
Third-quarter revenue came in at USD 13,246.8 mn – below USD 14,207.3 mn in the first quarter and USD 14,040.6 mn in the second. The sequential decline is modest, around 5.7%, but it is the second consecutive quarter of decline after the peak at the start of the year.
Year-on-year momentum weakened noticeably: revenue grew 30.8% in the first quarter and 14.0% in the second. That is a deceleration, not an acceleration, and it matters more than the quarterly level: the company is still growing, but the growth rate has more than halved in three months.
The facts do not disclose the cause of the slowdown. What is visible is that absolute revenue is falling quarter to quarter while the annual increase remains double-digit. For further growth, what matters is not the level itself but whether revenue returns above USD 14 bn in the next report.
EBITDA of USD 4,648.3 mn gives a 35.1% margin – above 34% for a second straight quarter and the best level in five quarters
Third-quarter EBITDA was USD 4,648.3 mn on revenue of USD 13,246.8 mn – a 35.1% margin. That is slightly below USD 4,793.2 mn in the second quarter but above USD 4,692.1 mn in the first, and relative to revenue the margin sits at a five-quarter high.
Operating profit was USD 4,324.4 mn, so the gap between EBITDA and operating profit is about USD 324 mn. That is a small difference and suggests depreciation does not absorb a large share of EBITDA.
The margin did not rise on one-off items: EBITDA fell with revenue, but more slowly. With revenue down 5.7% quarter on quarter, EBITDA fell only 3.0%, and that is what held the margin above 35%. The facts do not disclose which cost line contracted.
Net profit of USD 2,723.7 mn at a 20.6% net margin holds close to the second quarter even as revenue fell over the same period
Third-quarter net profit was USD 2,723.7 mn, a 20.6% net margin. Quarter on quarter profit fell from USD 2,801.4 mn, or 2.8%, while revenue dropped 5.7%.
Profit is holding up better than revenue: the margin did not sag despite the weaker top line. That is consistent with the EBITDA picture – the company keeps costs in check even as sales decline.
Over the trailing twelve months net profit was USD 7,222.8 mn. That is the base for the dividend and for the 15.4x P/E LTM; the quarterly USD 2,723.7 mn is part of that result, not a separate benchmark.
Net debt rose from USD 6.9 bn on 30 June to USD 7.7 bn on 30 September but fell from USD 15.5 bn a year earlier – the ratio to LTM EBITDA is 0.58
Net debt at 30 September was USD 7.7 bn against USD 6.9 bn on 30 June – an increase of USD 0.7 bn over the quarter. Over the year debt fell substantially: from USD 15.5 bn on 30 June 2025 to USD 7.7 bn on 30 September 2026, a drop of USD 7.9 bn.
The ratio of net debt to trailing-twelve-month EBITDA is 0.58. That is a moderate level: debt is less than annual EBITDA by more than a factor of 1.5. The facts do not disclose the direction of the ratio, so this is a level, not a statement that leverage rose or fell.
The quarterly increase of USD 0.7 bn does not look alarming against the annual reduction of USD 7.9 bn. The company can service debt from current EBITDA, and the headroom in the ratio remains large.
Trailing-twelve-month dividend yield is 3.3%, with payouts funded from profit rather than debt
The trailing-twelve-month dividend yield is 3.3% on the current price. Payouts rest on profit: net profit over the last twelve months was USD 7,222.8 mn, and the dividend base is built from it rather than from borrowed funds.
Our estimate of the current-year dividend starts from LTM profit of USD 7,222.8 mn and the current 3.3% yield. It hinges on the payout ratio the company maintains and on whether profit holds at the trailing-twelve-month level as revenue slows.
A 3.3% yield is modest next to high-payout names, but it is stable: debt at 0.58x EBITDA puts no pressure on payouts. What could reduce the dividend is a further fall in revenue and profit if the slowdown continues.
The stock trades at 9.3x EV/EBITDA against its own three-year average of 11.1 – 17% below its history, with P/E LTM at 15.4 and ROE at 11.7%
On trailing-twelve-month EV/EBITDA the stock trades at 9.3 against its own three-year average of 11.1 – 17% below its history. That is the only comparison the facts support; we do not benchmark it against sector peers.
P/E LTM is 15.4 with ROE at 11.7%. The return on equity is moderate, which explains why the market does not pay a premium to the stock's own history.
On the portal's model the share is priced 10% above fair value if EBITDA is re-priced at current commodity prices. That is our own model, not a market consensus, and it points to limited upside from the current price.
On the portal's model the share is priced 10% above fair value if EBITDA is re-priced at current commodity prices
The portal's model re-prices EBITDA at current commodity prices and values the stock at a target EV/EBITDA. On that basis the share comes out 10% above fair value.
This is not a market consensus or a target price: the model shows that at current commodity prices the upside is limited. The market capitalisation of USD 111,053 mn already reflects a significant part of current profit.
The gap with the multiple-based view is explainable: EV/EBITDA is below its own history, but the model at current commodity prices sees little headroom. For a holder this means further gains depend on commodity prices and on whether revenue returns to growth.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 111 bn USD |
| P/E (LTM) | 15.4 |
| EV/EBITDA (LTM) | 9.3 |
| P/B | 4.19 |
| Net debt / EBITDA (LTM) | 0.58 |
| ROE | 11.7% |
| Dividend yield (12m) | 3.3% |
| EV/EBITDA, 3-year average | 11.1 |
Bottom line
The report's strength remains the margin: EBITDA of USD 4,648.3 mn at a 35.1% margin and net profit of USD 2,723.7 mn at a 20.6% margin are holding up better than revenue. The weak spot is the top line: USD 13,246.8 mn is below the two prior quarters, and year-on-year growth slowed from 30.8% to 14.0%. Debt at 0.58x EBITDA and a 3.3% dividend yield support the stock, but the portal model sees it 10% above fair value. The key question for a holder is whether revenue returns to growth while the margin still holds.
Nucor Corporation: profit doubled, yet the market prices it above its own history
NUE →
On 26 October Nucor Corporation reported results for the fourth quarter of 2026. Revenue came in at 11,249.0 million dollars (+32.0% year on year), EBITDA at 2,279.0 million dollars (+82.3%), and net profit at 1,319.0 million dollars (+117.3%). The EBITDA margin rose to 20.3% from 14.7% a year earlier, and the net margin to 11.7% from 7.1%. The share looks neutral: profit growth is strong, but the EV/EBITDA multiple of 9.4 is above its own three-year average of 8.5, and the portal's model implies a downside of 86%.
Key takeaways
— Revenue grew 32.0% year on year, an acceleration from 23.0% a quarter earlier
— EBITDA rose 82.3%, with the margin up to 20.3% from 14.7%
— Net profit grew 117.3%, yet the 11.7% net margin remains modest for such a jump
— Leverage of 0.73 EBITDA LTM is low, but the facts do not disclose the debt dynamics
— A dividend yield of 0.87% does not offset re-rating risk
— EV/EBITDA of 9.4 is 11% above its own three-year average of 8.5
— The portal's model implies a downside of 86% to the current price
Attractiveness
Key figures, USD bn
| Metric | Q4 2025 | Q4 2026 | Change |
|---|---|---|---|
| Revenue | 8.52 | 11.2 | +32.0% |
| EBITDA | 1.25 | 2.28 | +82.3% |
| Operating profit | 0.88 | — | — |
| Net profit | 0.61 | 1.32 | +117.3% |
| Operating cash flow | 1.34 | — | — |
| Capex | 0.81 | — | — |
| EBITDA margin | 14.7% | 20.3% | +5.6 pp |
| Net margin | 7.1% | 11.7% | +4.6 pp |
Revenue grew 32.0% year on year, an acceleration from 23.0% a quarter earlier
In the fourth quarter of 2026 Nucor Corporation's revenue reached 11,249.0 million dollars, 32.0% more than a year earlier. A quarter before, growth was 23.0%, so the pace accelerated. This is already the third consecutive quarter with growth above 20%: in the second quarter of 2026 revenue added 23.0%, in the third – 32.0%.
The acceleration coincided with EBITDA rising to 2,279.0 million dollars from 1,250.0 million dollars a year earlier. Profit grew faster than revenue, so it was not only volumes but also prices or the sales mix. The facts do not disclose what exactly produced this effect, so we limit ourselves to stating that revenue and EBITDA accelerated together.
EBITDA rose 82.3%, with the margin up to 20.3% from 14.7%
EBITDA for the fourth quarter of 2026 was 2,279.0 million dollars, 82.3% more than a year earlier. The EBITDA margin rose to 20.3% from 14.7%. Such a margin gain on 32.0% revenue growth means costs grew slower than sales.
Net profit increased 117.3% to 1,319.0 million dollars, and the net margin rose to 11.7% from 7.1%. Profit grew faster than EBITDA, which may point to lower depreciation or interest costs relative to revenue. The facts provide no breakdown, so we do not name the cause.
Net profit grew 117.3%, yet the 11.7% net margin remains modest for such a jump
Net profit for the fourth quarter of 2026 was 1,319.0 million dollars versus 607.0 million dollars a year earlier. Growth of 117.3% is the strongest among the quarters of 2026. At the same time, a net margin of 11.7% means about 12 cents of profit per dollar of revenue.
For a steel company such a margin does not look anomalous, but it is below what one might expect with an EBITDA margin of 20.3%. The gap of 8.6 percentage points is depreciation, interest and taxes. The facts do not disclose their dynamics, so we limit ourselves to stating the level.
Leverage of 0.73 EBITDA LTM is low, but the facts do not disclose the debt dynamics
Net debt at the latest balance-sheet date was 4,965.0 million dollars, and the ratio of net debt to trailing-twelve-month EBITDA was 0.73. That is a low level: the company could cover its debt in less than a year of operating profit.
The facts do not contain a net debt figure for the fourth quarter of 2026, so the direction of change is not disclosed. We can only record the level of 0.73 and note that it poses no risk to dividends or capital expenditure.
A dividend yield of 0.87% does not offset re-rating risk
The trailing-twelve-month dividend yield is 0.87%. That is a low level and provides no meaningful support for the share price. With net profit of 3,596.0 million dollars over the last twelve months and a market capitalisation of 58,762.1 million dollars, payouts remain modest relative to profit.
The facts do not contain the dividend per share or the payout ratio, so the sustainability of payments cannot be assessed. A yield of 0.87% is lower than one might expect from a company with such low leverage, but without data on the payout policy we draw no conclusions about its change.
EV/EBITDA of 9.4 is 11% above its own three-year average of 8.5
The trailing-twelve-month EV/EBITDA multiple is 9.4, 11% above its own three-year average of 8.5. This means the market values the company more expensively than it did on average over the past three years. The trailing-twelve-month P/E is 16.3.
Profit growth of 117.3% in the fourth quarter of 2026 could have driven a re-rating, but the current multiple is already above its historical norm. The portal's model, which reprices EBITDA at current commodity prices at the target EV/EBITDA, implies a downside of 86% to the current price. This is our own estimate, not a market consensus.
The portal's model implies a downside of 86% to the current price
According to the portal's model, which reprices EBITDA at current commodity prices at the target EV/EBITDA, the fair value of the share is 86% below the current market price. This means the market is pricing in higher steel prices or a more sustainable margin than our model assumes.
The share closed at 258.11 dollars before the release, lost 0.3% on the release day and lost 0.3% from the release to 26 October 2026. The market reaction is muted: a strong report did not lead to a rally, which may indicate the results were already priced in.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 58.8 bn USD |
| P/E (LTM) | 16.3 |
| EV/EBITDA (LTM) | 9.4 |
| P/B | 2.81 |
| Net debt / EBITDA (LTM) | 0.73 |
| ROE | 7.8% |
| Dividend yield (12m) | 0.9% |
| EV/EBITDA, 3-year average | 8.5 |
Bottom line
The strong side of the report is revenue acceleration to 32.0% and EBITDA growth of 82.3%, which expanded the margin to 20.3%. However, profit growth of 117.3% is largely a base effect: a year earlier net profit was only 607.0 million dollars. Leverage of 0.73 EBITDA LTM is low, but a dividend yield of 0.87% does not offset re-rating risk. The verdict is neutral: business growth is strong, but the current price already reflects much of it, and the portal's model points to substantial downside.
Alliance Resource Partners: profit up 46.8%, but half the gain came from one-off items
ARLP →
On 26 October Alliance Resource Partners reported third-quarter 2026 results: revenue of $603.0 million (+5.5% year on year), adjusted EBITDA of $233.9 million (+27.7%) and net income of $139.6 million (+46.8%). Revenue growth accelerated from +0.7% in the second quarter to +5.5% in the third on coal logistics and record royalties, but a visible share of profit came from bitcoin revaluation and a one-off acquisition gain. At an EV/EBITDA of 5.6 against its own three-year average of 4.5 and a portal-model upside of -2%, the unit looks neutral: the 9.1% dividend yield is attractive, but the price already reflects the recovery.
Key takeaways
— Revenue accelerated to +5.5% on coal volumes and record royalties
— EBITDA margin rose to 38.8% as unit costs fell 13.1%
— Half the profit gain came from bitcoin revaluation and a one-off acquisition gain
— Leverage of 0.58x LTM EBITDA is low, but liquidity is limited to $430.8 million
— The $0.60 quarterly distribution is covered 1.76x by cash flow
— The 5.6 multiple is 22% above its own three-year average of 4.5
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 0.57 | 0.60 | +5.5% |
| EBITDA | 0.18 | 0.23 | +27.7% |
| Operating profit | 0.10 | — | — |
| Net profit | 0.10 | 0.14 | +46.8% |
| Operating cash flow | 0.21 | — | — |
| Capex | 0.06 | — | — |
| EBITDA margin | 32.1% | 38.8% | +6.7 pp |
| Net margin | 16.6% | 23.2% | +6.6 pp |
Revenue accelerated to +5.5% on coal volumes and record royalties
Third-quarter 2026 revenue was $603.0 million against $571.4 million a year earlier, up 5.5%. That is an acceleration from +0.7% in the second quarter: the company restored volumes after the extended longwall move at Hamilton and raised sales in Appalachia.
The coal segment sold 9.348 million tons (+7.4% year on year), but the average price fell 8.3% to $53.93 per ton on a mix shift toward lower-priced Tunnel Ridge volumes. Oil and gas royalties rose to a record $59.8 million, and total royalty revenue reached $87.5 million (+52.5%).
The AllDale III IV acquisition, closed on 1 July 2026 for $206.2 million, added about 48,500 net royalty acres and increased oil and gas volumes 1.6-fold. Without this purchase, revenue growth would have been noticeably more modest.
EBITDA margin rose to 38.8% as unit costs fell 13.1%
Adjusted EBITDA reached $233.9 million, up 27.7% year on year, and the margin rose to 38.8% from 32.1%. The main driver was a 13.1% fall in coal-segment unit costs to $35.64 per ton.
In the Illinois Basin, cost per ton fell 10.2% on higher output at Hamilton and improved performance at River View. In Appalachia, unit costs dropped 19.9% on higher production at Tunnel Ridge and a favourable sales mix.
Coal-segment EBITDA rose 18.6% to $186.8 million, while the royalties segment added $61.8 million (+40.0%). Operating expenses fell 4.4% while revenue grew, which delivered the margin expansion.
Half the profit gain came from bitcoin revaluation and a one-off acquisition gain
Net income was $139.6 million against $95.1 million a year earlier, up 46.8%. The release explicitly names two non-operating items: a $16.5 million revaluation of digital assets and a $6.3 million gain on remeasuring the previously held stake in AllDale III.
Together these items account for about $22.8 million, or roughly half of the $44.5 million profit increase. Without them, net income growth would have been closer to 25%, still solid but noticeably more modest than the headline.
Profit was also supported by equity-method investment income rising to $12.8 million from $4.5 million and by lower operating expenses. Partly offsetting were higher income tax ($19.0 million versus $5.9 million) and a $7.3 million loss on derivatives assumed in the acquisition.
Leverage of 0.58x LTM EBITDA is low, but liquidity is limited to $430.8 million
Net debt at the latest annual balance sheet was $394.2 million, and net debt to trailing-twelve-month EBITDA was 0.58. That is a comfortable level for a coal company, although the ratio alone says nothing about its direction.
Total debt and finance leases at 30 September 2026 were $679.9 million, and the debt-to-EBITDA ratio for the trailing twelve months was 0.89. Liquidity stood at $430.8 million, including $84.8 million of cash and $346.0 million of available credit lines.
Interest expense rose to $15.8 million from $11.0 million a year earlier, still moderate at this leverage. The company also holds 673 bitcoins valued at $56.3 million, which add volatility to earnings but not to debt.
The $0.60 quarterly distribution is covered 1.76x by cash flow
The board approved a quarterly distribution of $0.60 per unit, or $2.40 annualised. Payment is due on 13 November 2026 to unitholders of record on 6 November.
Distributable cash flow for the quarter was $136.8 million, and the coverage ratio was 1.76x, more than 27% better than the previous quarter. With a market capitalisation of $3,396.6 million, the trailing-twelve-month dividend yield is 9.1%.
Our estimate: at the current quarterly pace, the annual payout will stay at $2.40 per unit. It rests on earnings and cash flow but is sensitive to coal prices and to the one-off items that already boosted profit this quarter. A cut is possible if energy prices fall or capital spending exceeds the $270–290 million guided for the year.
The 5.6 multiple is 22% above its own three-year average of 4.5
On a trailing-twelve-month EV/EBITDA basis the unit trades at 5.6 against its own three-year average of 4.5, or 22% above its history. The trailing P/E is 10.9 and return on equity is 17.8%.
The portal model, which reprices EBITDA at current commodity prices at the target EV/EBITDA, implies -2% upside to the current price. That is not a consensus but our own model, and it says the market has already priced in the earnings recovery.
The price reaction was muted: the unit added 1.0% on the release day and the same from publication to 26 October. With a 9.1% yield and a multiple above its historical average, further gains require confirmation that earnings are sustainable without one-off items.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 3.40 bn USD |
| P/E (LTM) | 10.9 |
| EV/EBITDA (LTM) | 5.6 |
| P/B | 1.83 |
| Net debt / EBITDA (LTM) | 0.58 |
| ROE | 17.8% |
| Dividend yield (12m) | 9.1% |
| EV/EBITDA, 3-year average | 4.5 |
Bottom line
The quarter was strong operationally: revenue accelerated to +5.5%, EBITDA margin rose to 38.8% and unit costs fell 13.1%. However, half the profit gain came from bitcoin revaluation and a one-off acquisition gain rather than the core business. The distribution is covered 1.76x by cash flow and yields 9.1%, which supports the unit. The question for a holder now is whether earnings hold without one-off items at a multiple above its own history. Verdict – neutral: the dividend is attractive, but the price already reflects the recovery.
Tankers and royalties leave the energy patch in their wake
This season's commodity results split the market cleanly in two. At the top, crude tankers posted a median revenue gain of +109.6% year over year, precious-metals royalties +99.8% and lithium +83.9%. At the bottom, polysilicon fell -17.0%, timberlands -15.4% and forestry & paper -8.7%. The spread between the best and worst industry medians is roughly 127 percentage points — a dispersion wide enough to make sector selection the single most important decision an investor could have made.
Revenue growth by industry (median YoY)
Tanker operators turned a freight squeeze into a profit gusher
Okeanis Eco Tankers led the crude-tanker cohort with revenue up +239.4% and EBITDA up +432.6% year over year. International Seaways followed with revenue +138.8%, EBITDA +242.8% and net profit +378.4%. DHT Holdings was no slouch either, posting revenue +122.7% and EBITDA +234.8%. The common thread: tight vessel supply and elevated tonne-mile demand turned operating leverage into an earnings supercycle.
Precious-metals royalties delivered a quieter but equally potent surge. Osisko Gold Royalties grew revenue +126.4% and net profit +165.1%, while Royal Gold posted revenue +114.9% and EBITDA +117.4%. These are asset-light models with fixed cost bases, so a rising gold and silver price flows almost directly to the bottom line — and the market rewarded them with premium multiples.
Polysilicon and timber are the season's cautionary tales
Daqo New Energy saw revenue fall -17.0% and EBITDA collapse -80.8% year over year as polysilicon oversupply crushed pricing. In timber, Acadian Timber posted revenue -15.4%, EBITDA -42.1% and net profit -51.1%, while West Fraser Timber suffered revenue -6.4%, EBITDA -44.2% and a net loss that widened -154.2%. Even Cameco, the uranium bellwether, saw revenue slip -5.6% and EBITDA -47.4% — a sharp reminder that not every energy transition story is firing on all cylinders.
The plot twist: agribusiness profits surged while revenue collapsed
Archer-Daniels-Midland delivered the season's most counterintuitive result: revenue fell -69.8% year over year, yet EBITDA jumped +142.3% and net profit soared +314.6%. That is margin expansion on a massive scale — likely driven by a mix shift toward higher-margin processing and away from low-margin merchandising. It is a warning to anyone who equates revenue growth with earnings power: ADM's stock may be cheap on EV/EBITDA at 14.2x, but the revenue line is a distraction.
Cheap for their growth: tankers and refiners trade at single-digit earnings
Scorpio Tankers grew revenue +77.5% and net profit +427.2%, yet trades at just 5.4x earnings and 4.5x EV/EBITDA. International Seaways is even cheaper at 7.0x earnings and 6.6x EV/EBITDA despite net profit growth of +378.4%. In refining, Par Pacific trades at 4.6x earnings and 3.7x EV/EBITDA with revenue up +56.8% and EBITDA +334.5%. These are deep-value multiples for businesses printing cash — the market is clearly pricing in a cyclical peak, but the earnings power is undeniable. At the other extreme, Cameco trades at 133.8x earnings and 56.9x EV/EBITDA despite falling revenue and EBITDA — priced for a nuclear renaissance that has yet to show up in the numbers.
Income hunters: tankers and royalties pay you to wait
Scorpio Tankers offers a dividend yield that is among the highest in the dataset, backed by a 5.4x P/E and a net profit surge of +427.2%. International Seaways and DHT Holdings also combine high yields with single-digit earnings multiples. Among royalties, Franco-Nevada and Wheaton Precious Metals pay modest yields but offer inflation-linked revenue streams. For income-focused investors, the tanker sector is the clear standout — but remember that shipping dividends are cyclical and can be cut as fast as they are raised.
Looking at the three-year revenue CAGR, a few names stand out: IAMGOLD at +43.8%, Saturn Oil & Gas at +35.9% and Pan American Silver at +34.3%. These are the compounders that have grown through the cycle, not just benefited from a single strong quarter. As we look ahead, watch whether tanker rates hold at these elevated levels and whether the margin expansion in agribusiness is sustainable. The market is paying up for growth in royalties and tankers while punishing polysilicon and timber — a divergence that is likely to persist until supply discipline returns to the laggards.
Players: growth & yield (no absolute levels)
| Company | Industry | Revenue YoY | EBITDA YoY | Net profit YoY | P/E |
|---|---|---|---|---|---|
| Glencore (H1) | Diversified mining & trading | +48.6% | — | — | n/m |
| Exxon Mobil (Q2) | Oil & gas | +42.3% | +68.6% | +105.1% | 23.4x |
| Shell (Q2) | Integrated oil & gas | +44.7% | +79.2% | +200.5% | 12.4x |
| Chevron (Q2) | Oil & gas | +49.9% | +139.8% | +384.8% | 21.0x |
| TotalEnergies (Q2) | Integrated oil & gas | +27.8% | +38.9% | +102.4% | 11.7x |
| Marathon Petroleum (Q2) | Oil refining | +53.8% | +173.3% | +322.5% | 16.4x |
| Phillips 66 (Q2) | Oil refining | +53.1% | +101.6% | +338.7% | 16.0x |
| Valero Energy (Q3) | Oil refining | +43.3% | — | — | 18.0x |
| Equinor (Q2) | Natural gas | +37.4% | +76.9% | +269.2% | 14.0x |
| Energy Transfer LP (Q2) | Oil | +78.4% | +37.2% | +79.5% | 13.3x |
| Petrobras (Q2) | Oil | +56.2% | +100.4% | +115.3% | 6.5x |
| Rio Tinto (Q2) | Diversified mining | +14.5% | — | +45.9% | 13.3x |
| BHP Group (Q2) | Diversified mining | +18.3% | +25.9% | -8.9% | 20.1x |
| Eni (Q3) | Integrated oil & gas | +26.6% | +4.1% | +292.1% | 30.2x |
Eni: profit nearly quadrupled, but the margin compressed and the multiple sits above its own history
E →Eni's results for the third quarter of 2026, ended 30 September, showed revenue of USD 29,909.0 mn, up 26.6% year on year, EBITDA of USD 3,924.3 mn and net profit of USD 3,681.9 mn, up 292.1% from a year earlier. The EBITDA margin narrowed to 13.1% from 16.0%, while the net margin rose to 12.3% from 4.0%. Leverage stands at 1.88x LTM EBITDA, and EV/EBITDA of 8.3 compares with the company's own three-year average of 5.5. At the current price the share looks neutral: strong profit growth and a 3.1% dividend yield are offset by operating margin compression and a premium to its own history.
Key takeaways
— Revenue rose 26.6% year on year in the third quarter, an acceleration from 15.3% in the first quarter
— The EBITDA margin compressed to 13.1% from 16.0%, even as profit nearly quadrupled
— Net profit of USD 3,681.9 mn came in above operating profit of USD 2,139.1 mn
— Net debt of USD 25.7 bn at 1.88x EBITDA is a moderate load, but it rose by USD 1.9 bn over the year
— Operating cash flow of USD 5,007.6 mn covers interest and investment needs, but the dividend absorbs a visible share
— The 3.1% dividend yield is modest and hinges on the durability of profit
— EV/EBITDA of 8.3 is 51% above the company's own three-year average of 5.5 – the share is more expensive than its history
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 23.6 | 29.9 | +26.6% |
| EBITDA | 3.77 | 3.92 | +4.1% |
| Operating profit | 1.39 | 2.14 | +53.6% |
| Net profit | 0.94 | 3.68 | +292.1% |
| Operating cash flow | 3.60 | 5.01 | +39.1% |
| EBITDA margin | 16.0% | 13.1% | -2.9 pp |
| Net margin | 4.0% | 12.3% | +8.3 pp |
Revenue rose 26.6% year on year in the third quarter, an acceleration from 15.3% in the first quarter
Revenue for the third quarter of 2026 was USD 29,909.0 mn, up 26.6% from the same quarter a year earlier. Growth was 15.3% in the first quarter, so the pace accelerated. The quarterly path within the year is uneven: after USD 22,971.3 mn in the first quarter, revenue in the second is not disclosed, but the third quarter is clearly above both the first quarter and the fourth quarter of 2025.
The acceleration rests on prices and volumes, but the facts provide no segment breakdown, so the exact contribution of upstream and downstream cannot be named. What matters is that revenue growth is not matched by operating profit growth: operating profit was USD 2,139.1 mn, below the first quarter of 2025. The company is selling more but earning less on each dollar of revenue.
The EBITDA margin compressed to 13.1% from 16.0%, even as profit nearly quadrupled
EBITDA for the third quarter was USD 3,924.3 mn, up just 4.1% year on year against revenue growth of 26.6%. As a result, the EBITDA margin fell to 13.1% from 16.0% a year earlier. This is the key operating fact of the report: revenue added a quarter, while EBITDA-level profitability barely grew.
Margin compression means costs grew faster than revenue. The facts give no line-item detail, so the specific cause – procurement, transport or royalties – cannot be named. But the effect is visible in absolute terms: with revenue near USD 30 bn, each percentage point of margin is worth about USD 300 mn, and the loss of three points is roughly USD 900 mn of EBITDA not earned relative to last year's proportion.
Net profit of USD 3,681.9 mn came in above operating profit of USD 2,139.1 mn
Net profit for the third quarter was USD 3,681.9 mn against USD 938.9 mn a year earlier, up 292.1%. Operating profit was USD 2,139.1 mn, so net profit exceeds operating profit by more than USD 1.5 bn. That relationship means a visible gain was booked below the operating line – likely financial items or one-offs – but the facts do not disclose its nature.
The net margin rose to 12.3% from 4.0%, which looks stronger than the operating trend. For assessing the durability of profit, it matters that operating profit of USD 2,139.1 mn is below the first quarter of 2025, when it was USD 3,915.5 mn. If the one-off gain does not repeat, next quarter's net profit will be closer to operating profit.
Net debt of USD 25.7 bn at 1.88x EBITDA is a moderate load, but it rose by USD 1.9 bn over the year
Net debt at 30 September 2026 was USD 25,688.4 mn, or USD 25.7 bn. The ratio to LTM EBITDA is 1.88x, moderate for an oil and gas company. From 31 March 2026 net debt fell from USD 26.0 bn to USD 25.7 bn, a change of USD 0.3 bn, while over twelve months it rose from USD 23.8 bn on 30 September 2025 by USD 1.9 bn.
The rise in debt over the year despite strong profit is explained by investment and shareholder payouts, but the facts give no cash-flow breakdown. What matters is that the 1.88x level creates no pressure on the balance sheet, but also leaves no room for new debt without EBITDA growth. Interest expense is not disclosed in the facts, so its coverage by cash flow cannot be assessed.
Operating cash flow of USD 5,007.6 mn covers interest and investment needs, but the dividend absorbs a visible share
Operating cash flow for the third quarter was USD 5,007.6 mn, above EBITDA of USD 3,924.3 mn. That means working capital released funds rather than absorbing them. The flow covers capital expenditure, the amount of which is not disclosed in the facts, and dividend payments.
The trailing twelve-month dividend yield is 3.1%, which at a market capitalisation of USD 90.0 bn corresponds to payouts of about USD 2.8 bn a year. That is roughly half of a quarterly operating flow, so the dividend is covered, but not with a large cushion. If EBITDA stays under pressure and debt keeps rising, room to increase payouts will narrow.
The 3.1% dividend yield is modest and hinges on the durability of profit
The last twelve months' payout gives a yield of 3.1% on the current price. For the oil and gas sector this is a moderate level, and it is lower than one might expect with quarterly profit of USD 3.7 bn. The reason is that a significant part of third-quarter profit is likely one-off, and the company is in no hurry to distribute it.
Our estimate for the current year's dividend assumes the payout stays at the level that produces a 3.1% yield, about USD 2.8 bn of payments. That depends on whether the one-off gain below the operating line repeats and on the company's willingness to add debt. If profit returns to the operating level of USD 2.1 bn a quarter, payouts could be cut.
The 3.1% yield is below the key rate, which is not given in the facts, but that is normal for equities. The main risk to the dividend is not debt but margin compression: with a 13.1% EBITDA margin and 26.6% revenue growth, the company earns less on each dollar, and that limits the payout base.
EV/EBITDA of 8.3 is 51% above the company's own three-year average of 5.5 – the share is more expensive than its history
The LTM EV/EBITDA multiple is 8.3 against the company's own three-year average of 5.5. That is a 51% premium, meaning the market values the company above its three-year average. The LTM P/E is 28.9, also high for the oil and gas sector.
The premium is justified only if third-quarter profit is sustainable. But operating profit of USD 2,139.1 mn is below the first quarter of 2025, and the EBITDA margin compressed. On the portal's model, which re-prices EBITDA at current commodity prices at the target EV/EBITDA, the share's fair value is 5% below the current price. This is not a consensus but our own estimate.
For comparison: at a multiple at the three-year average of 5.5, the share would be significantly cheaper. The current price embeds a margin recovery that the report does not show. If the margin does not start rising next quarter, the premium to history will be hard to hold.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 90.0 bn USD |
| P/E (LTM) | 28.9 |
| EV/EBITDA (LTM) | 8.3 |
| P/B | 1.66 |
| Net debt / EBITDA (LTM) | 1.88 |
| ROE | 8.0% |
| Dividend yield (12m) | 3.1% |
| EV/EBITDA, 3-year average | 5.5 |
Bottom line
The strong side of the report is revenue: 26.6% growth, accelerating from 15.3% in the first quarter, and operating cash flow of USD 5,007.6 mn, which covers investment and the dividend. The weak side is the margin: EBITDA grew just 4.1%, the margin compressed to 13.1% from 16.0%, and operating profit of USD 2,139.1 mn is below last year's levels. Net profit of USD 3,681.9 mn looks impressive, but it exceeds operating profit, and its durability is in question. Net debt of USD 25.7 bn at 1.88x EBITDA is moderate, and the 3.1% dividend yield is modest. The share trades at a 51% premium to its own three-year EV/EBITDA average, and on the portal's model fair value is 5% below the current price. The verdict is neutral: revenue and cash-flow growth are balanced by margin compression and a rich valuation.
Karoon Energy: revenue up 16.8%, but net debt added USD 0.1 bn over nine months
KAR →
Karoon Energy reported results for Q3 2026. Quarterly revenue came in at USD 191.6 mn, up 16.8% year on year from Q3 2025. Net debt stood at USD 269.2 mn as of 30 September 2026, or 1.54x LTM EBITDA. The LTM EV/EBITDA multiple of 5.5x is above its own three-year average of 3.4x, while the portal model puts the share's upside to fair value at +91%. With revenue growth, moderate leverage and a 2.6% dividend yield, the share looks rather attractive, though the premium to its own history caps that conclusion.
Key takeaways
— Q3 revenue added 16.8% year on year to USD 191.6 mn
— Net debt rose from USD 0.1 bn at end-2025 to USD 0.3 bn on 30 September 2026
— Leverage at 1.54x LTM EBITDA remains moderate
— LTM net profit of USD 125.5 mn implies a P/E of 6.6x and ROE of 12.5%
— Trailing twelve-month dividend yield stands at 2.6%
— EV/EBITDA of 5.5x is 64% above its own three-year average of 3.4x
— The portal model puts the share's upside to fair value at +91%
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 0.16 | 0.19 | +16.8% |
Q3 revenue added 16.8% year on year to USD 191.6 mn
Q3 2026 revenue came in at USD 191.6 mn versus USD 164.1 mn in Q3 2025. The 16.8% year-on-year increase is the only growth rate confirmed on a quarterly basis.
Over the trailing twelve months revenue reached USD 628.6 mn. That base spans different quarters and is not directly comparable with quarterly dynamics, but it shows the scale behind the multiples.
Net debt rose from USD 0.1 bn at end-2025 to USD 0.3 bn on 30 September 2026
Net debt stood at USD 269.2 mn on 30 September 2026. At end-2025 it was USD 0.1 bn, so it added USD 0.1 bn over nine months. Over twelve months, from 30 September 2025, the change is the same – plus USD 0.1 bn.
Rising debt alongside rising revenue means part of the cash flow went somewhere other than debt repayment. The facts do not say where, so we stick to the level: absolute debt increased rather than fell.
For a holder the ratio to earnings matters more than the absolute figure, and that ratio remains moderate.
Leverage at 1.54x LTM EBITDA remains moderate
The ratio of net debt to LTM EBITDA is 1.54x. That is a level at which debt service does not look burdensome for a business with USD 628.6 mn of LTM revenue.
The facts do not give the direction of the ratio: the earlier value is not disclosed, so we cannot say leverage rose or fell. We record the current level only.
With LTM EBITDA of USD 174.6 mn, debt coverage remains adequate for the company to meet its obligations without strain on operating cash flow.
LTM net profit of USD 125.5 mn implies a P/E of 6.6x and ROE of 12.5%
LTM net profit is USD 125.5 mn. Against a market capitalisation of USD 833.0 mn that gives a P/E of 6.6x and a return on equity of 12.5%.
Profit at that level on USD 628.6 mn of revenue means the company retains a meaningful share of revenue as net income. The facts do not isolate one-off items, so we treat it as the operating base.
The price-to-earnings ratio is lower than many commodity companies', which partly offsets the EV/EBITDA premium to its own history.
Trailing twelve-month dividend yield stands at 2.6%
The trailing twelve-month dividend yield is 2.6%. That is a modest level for a commodity company, but it reflects the current share price and amounts actually paid.
The facts do not disclose what was paid and for which year, so we do not give a forward dividend estimate. A 2.6% yield is lower than one might expect from a business on a P/E of 6.6x – the payout ratio is probably conservative, but the facts do not confirm it.
For a holder the dividend is not the main argument here: the bulk of the return should come from a re-rating if the portal model is right.
EV/EBITDA of 5.5x is 64% above its own three-year average of 3.4x
The LTM EV/EBITDA multiple is 5.5x. Its own three-year average is 3.4x, so the current valuation is 64% above history. On this multiple the share is more expensive than it has typically been over the past three years.
The premium to its own history means the market has already priced in part of future growth. At the same time, a P/E of 6.6x and ROE of 12.5% suggest the share is not stretched on earnings.
On the portal model, which re-prices EBITDA at current commodity prices at the target EV/EBITDA, the upside to fair value is +91%. That is our own estimate, not a market consensus.
The portal model puts the share's upside to fair value at +91%
Our model re-prices EBITDA at current commodity prices and values the share at the target EV/EBITDA. The result is +91% upside to fair value.
That calculation rests on current commodity prices and the target multiple, so its sensitivity to oil prices is high. If prices fall, the valuation falls.
The model is not a consensus and not a target price. It shows how far the current market price diverges from the estimate under the stated assumptions, and it supports the rather-attractive verdict.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 0.83 bn USD |
| P/E (LTM) | 6.6 |
| EV/EBITDA (LTM) | 5.5 |
| P/B | 0.81 |
| Net debt / EBITDA (LTM) | 1.54 |
| ROE | 12.5% |
| Dividend yield (12m) | 2.6% |
| EV/EBITDA, 3-year average | 3.4 |
Bottom line
The strong side of the report remains revenue: USD 191.6 mn in Q3, up 16.8% year on year. LTM net profit of USD 125.5 mn and ROE of 12.5% confirm the business earns money, and leverage at 1.54x LTM EBITDA creates no strain. The weak spot is valuation: EV/EBITDA of 5.5x is 64% above its own three-year average of 3.4x, and the premium to history is already in the price. The 2.6% dividend yield is modest and does not offset that premium. The key question for a holder is whether the company will meet the growth expectations the market has already paid for; the portal model's +91% upside says it will, but that is our estimate, not a guarantee.
Alpha Metallurgical Resources: revenue accelerated to +6.4% but EBITDA fell 28.9% – higher volumes did not offset weaker pricing
AMR →
On October 23 Alpha Metallurgical Resources released preliminary third-quarter 2026 results. Revenue came in at $560.6 million, up 6.4% year on year after a 10.7% decline in the prior quarter, adjusted EBITDA was $29.4 million (–28.9% year on year) and the net loss was $9.3 million. Higher volumes of 3.9 million tons did not offset weaker realizations, and at an EV/EBITDA of about 4.6 against its own three-year average the share looks neutral: the discount to history is balanced by margin compression and a net loss.
Key takeaways
— Revenue accelerated to +6.4% year on year, and it is held up by 3.9 million tons of volume, not by price
— EBITDA fell 28.9% despite higher revenue because a realization of $121.09 per ton does not cover costs
— The $9.3 million net loss comes from weak gross margin, not from one-off write-downs
— There is almost no debt: $10.6 million of borrowings against $334.1 million of cash
— $1.2 billion of buybacks out of a $1.5 billion programme supported the equity, not the earnings
— At 4.6 EV/EBITDA the stock is below its own three-year average, but the portal model shows –52% to fair value
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 0.53 | 0.56 | +6.4% |
| EBITDA | 0.04 | 0.03 | -28.9% |
| Operating profit | -0.00 | — | — |
| Net profit | -0.01 | -0.01 | — |
| Operating cash flow | 0.05 | — | — |
| Capex | 0.03 | — | — |
| EBITDA margin | 7.9% | 5.2% | -2.7 pp |
| Net margin | -1.0% | -1.7% | -0.7 pp |
Revenue accelerated to +6.4% year on year, and it is held up by 3.9 million tons of volume, not by price
In the third quarter of 2026 revenue was $560.6 million, 6.4% more than a year earlier. This is a reversal after a 10.7% decline in the second quarter: growth accelerated, and it is the first positive year-on-year quarter since early 2025.
The increase came from volume: met-segment sales reached 3.9 million tons, of which 3.6 million tons were metallurgical coal and 0.3 million tons thermal coal. Average realization was $121.09 per ton, and that, not volume, remains the weak spot: revenue excluding freight and handling was $474.1 million.
The sales mix shows that 51% of met coal went through other pricing mechanisms at an average of $107.03 per ton, while Australian-indexed exports fetched $150.46 and domestic sales $136.17. The higher the share of other contracts, the more revenue depends on spot prices, which were low in the reported quarter.
EBITDA fell 28.9% despite higher revenue because a realization of $121.09 per ton does not cover costs
Adjusted EBITDA in the third quarter of 2026 was $29.4 million against $41.4 million a year earlier – a 28.9% decline. The EBITDA margin compressed to 5.2% from 7.9% a year earlier: revenue grew, but each dollar of sales brings less operating profit.
The reason is costs. Met-segment cost of coal sales excluding freight and idle costs was $418.6 million, or $106.93 per ton, against a realization of $121.09. The $14.16 per ton gap is the entire negative margin, which after depreciation, accretion and amortization of intangibles turns into a loss.
GAAP coal margin was only $9.6 million, or $2.45 per ton. Management explicitly points to continued cost pressure: "stronger volumes than in the first half but continued cost pressure." This is not a one-off but a structural problem at the current level of met coal prices.
The $9.3 million net loss comes from weak gross margin, not from one-off write-downs
The net loss in the third quarter of 2026 was $9.3 million, or $0.73 per diluted share. A year earlier the loss was $5.5 million: a deterioration of $3.8 million despite 6.4% revenue growth.
The EBITDA reconciliation shows the loss is operational: interest expense was only $1.0 million, interest income $2.6 million and the tax benefit $5.7 million. Without the tax benefit the loss would have been almost twice as large. Depreciation of $35.5 million and accretion of $5.2 million are non-cash items, but they reflect the capital intensity of mining.
The net margin was –1.7% against –1.0% a year earlier. The loss is not tied to one-off write-downs or impairments: it is a direct consequence of realization barely covering cost. A return to profit requires either higher met coal prices or lower unit costs.
There is almost no debt: $10.6 million of borrowings against $334.1 million of cash
As of September 30, 2026 total liquidity was $443.4 million, including $334.1 million of cash and $184.3 million of unused availability under the ABL facility, partly offset by a $75.0 million minimum liquidity requirement. Total long-term debt including the current portion was only $10.6 million, there were no ABL borrowings and $40.7 million of letters of credit outstanding.
Net debt on the latest annual balance sheet was –$350.8 million, meaning the company has a net cash position. This matters for valuation: with a market cap of $30.7 million and negative net debt, an EV/EBITDA of about 4.6 reflects a low EBITDA base rather than leverage.
Operating cash flow for the third quarter is not disclosed in the release, but in the second quarter of 2026 it was $39.9 million against $45.1 million of capex. Negative free cash flow at these prices is the main risk to further buybacks.
$1.2 billion of buybacks out of a $1.5 billion programme supported the equity, not the earnings
Since the start of the buyback programme the company has repurchased about 7.1 million shares for about $1.2 billion out of the authorised $1.5 billion. In the third quarter of 2026 buybacks were minimal: $3.0 million for roughly 18,000 shares. Shares outstanding as of September 30, 2026 were 12,667,855.
Buybacks reduced the share count and supported the market cap but did not change the operating picture: a loss of $0.73 per share on 12.7 million shares means there is no profit even after shrinking the base. At the current free cash flow the programme may slow.
For a shareholder this means the main return of capital comes through buybacks rather than dividends. There is no dividend line in the facts, and the release does not mention dividends.
At 4.6 EV/EBITDA the stock is below its own three-year average, but the portal model shows –52% to fair value
The current EV/EBITDA of about 4.6 matches its own three-year average of 4.63, meaning the stock trades roughly at its historical level rather than at a discount. With a market cap of $30.7 million and negative net debt, the multiple reflects a low EBITDA base rather than a cheap valuation.
The portal model, which re-prices EBITDA at current commodity prices at the target EV/EBITDA, shows –52% upside to fair value. This means that even accounting for the low base, the market values the share above what the model implies at current met coal prices.
The share price before the release was $159.39, rose 2.6% on the release day and has held that level since. The market reaction to the loss was muted, but there is no sustained growth. A re-rating requires either a reversal in met coal prices or confirmed cost reduction.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 0.03 bn USD |
| ROE | -3.3% |
Bottom line
What was strong in the report was volume growth and revenue acceleration to +6.4% year on year, plus the near-absence of debt with $334.1 million of cash. What was weak was the operating economics: EBITDA fell 28.9%, the margin compressed to 5.2%, and the $9.3 million net loss contains no one-off write-downs and reflects a fundamental mismatch between prices and costs. $1.2 billion of buybacks supported the equity but not the earnings. The question for a holder now is when met coal prices will turn: until then, a 4.6 EV/EBITDA multiple with the portal model at –52% does not offer enough cushion. Verdict – neutral.
Martin Midstream Partners: revenue up 37.3%, but interest and sulfur carried the quarter
MMLP →
On October 21, Martin Midstream Partners reported third-quarter 2026 results: revenue of $231.7 million (+37.3% year on year), adjusted EBITDA of $23.6 million (+22.7%), and a net loss of $4.1 million versus $8.4 million a year earlier. The loss narrowed, but $14.7 million of interest expense and a weak fertilizer segment kept the bottom line negative. At the current price the unit looks neutral: an EV/EBITDA of 6.15 with net debt at 5.28x EBITDA and a dividend yield below 1% leaves little margin of safety.
Key takeaways
— Revenue rose 37.3% on sulfur products and lubricants, not on terminals
— Adjusted EBITDA grew 22.7%, but the margin compressed to 10.2%
— The net loss narrowed to $4.1 million, and interest of $14.7 million absorbs almost all of it
— Debt at 5.28x EBITDA and the credit facility rate leave little room to manoeuvre
— The $0.005 per unit dividend yields less than 1%
— An EV/EBITDA of 6.15 does not look cheap with negative free cash flow
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 0.17 | 0.23 | +37.3% |
| EBITDA | 0.02 | 0.02 | +22.7% |
| Operating profit | 0.01 | 0.01 | +48.0% |
| Net profit | -0.01 | -0.00 | — |
| Operating cash flow | -0.00 | -0.00 | — |
| Capex | 0.01 | — | — |
| EBITDA margin | 11.4% | 10.2% | -1.2 pp |
| Net margin | -5.0% | -1.8% | +3.2 pp |
Revenue rose 37.3% on sulfur products and lubricants, not on terminals
Third-quarter 2026 revenue was $231.7 million versus $168.7 million a year earlier. Growth accelerated: it was 18.2% in the second quarter and 37.3% now. Almost all of the increase came from two product lines: sulfur product sales rose to $57.4 million from $28.6 million, and specialty product revenue to $89.5 million from $62.4 million.
Terminalling and storage was flat at $25.9 million versus $25.8 million. Transportation added 14% to $61.1 million, but mostly through the marine fleet, while land transportation declined. Service revenue in the sulfur segment grew only 4% to $4.2 million – the effect is entirely in products.
That mix means revenue is sensitive to sulfur prices and lubricant volumes, not to contracted terminal services. Next quarter compares against a higher base: fourth-quarter 2025 revenue was already $174.2 million.
Adjusted EBITDA grew 22.7%, but the margin compressed to 10.2%
Adjusted EBITDA was $23.6 million versus $19.3 million a year earlier. It grew, but slower than revenue: the margin fell to 10.2% from 11.4%. The reason is the mix – lower-margin product lines are growing faster than services.
The segments were uneven. Sulfur delivered $5.8 million versus $3.9 million: pure sulfur added $4.5 million, while fertilizer lost $3.4 million on compressed margins and lower volumes. Specialty products rose to $5.9 million from $3.9 million on lubricants. Terminalling fell to $8.3 million from $9.7 million, and transportation rose to $7.2 million from $5.3 million.
Operating profit was $10.2 million versus $6.9 million. The gap between EBITDA and operating profit is depreciation of $13.1 million, up from $12.3 million. The EBITDA margin is lower than a year ago, which is the main argument against treating the revenue growth as a clean improvement.
The net loss narrowed to $4.1 million, and interest of $14.7 million absorbs almost all of it
The third-quarter net loss was $4.1 million versus $8.4 million a year earlier. Loss per unit was $0.10 versus $0.21. The improvement came from operating profit, up $3.3 million, and from a tax effect: a $0.6 million benefit this quarter versus a $0.7 million expense a year ago.
Interest expense was almost unchanged at $14.7 million versus $14.6 million. That is more than the entire operating profit. With $483.5 million of debt and an 11.5% coupon on the senior secured notes, interest remains the main constraint on earnings.
Operating cash flow for the quarter was negative at minus $4.9 million versus minus $1.2 million a year earlier. The company attributes this to annual maintenance turnarounds at the fertilizer plants and the semi-annual interest payment on the notes, which temporarily increase revolver borrowings.
Debt at 5.28x EBITDA and the credit facility rate leave little room to manoeuvre
Net debt at the latest annual balance sheet was $498.4 million, or 5.28x trailing-twelve-month adjusted EBITDA. Total debt at September 30, 2026 was $483.5 million, including $400 million of senior notes and $83.5 million on the revolver. Available liquidity was $21.9 million against a $115 million facility.
The covenant interest coverage ratio is 1.86x and total leverage 4.96x. The company notes the ratio was unchanged from the second quarter as trailing-twelve-month Credit Adjusted EBITDA improved for the second consecutive quarter. The absolute rise in debt from $439.1 million at end-2025 to $483.5 million reflects seasonal borrowings.
Free cash flow is negative: minus $10.1 million for the first nine months of 2026 after capital spending, turnarounds and the investment in the DSM Semichem joint venture. Until cash flow turns positive, debt reduction depends on EBITDA growth.
The $0.005 per unit dividend yields less than 1%
A dividend of $0.005 per unit was declared for the third quarter of 2026, payable November 13, 2026. At a price of $2.05 the yield is about 0.94%. It is a token payment: $0.6 million went to distributions over nine months against negative free cash flow of $10.1 million.
Our estimate for the current year is that the quarterly payment stays at $0.005, or about $0.02 annually. It rests not on profit, which is absent, but on the minimum payout the company can afford at current debt. Everything left after interest and turnarounds goes to maintaining infrastructure.
The yield is below the key rate and below what we consider fair for a company with leverage above 5x. A further cut could come from continued pressure on fertilizer or higher capital spending: the company has already raised its 2026 capex estimate on higher labour and material costs.
An EV/EBITDA of 6.15 does not look cheap with negative free cash flow
EV/EBITDA on a trailing-twelve-month basis is 6.15. Return on equity is 5.9%. With a market capitalisation of $82.4 million and net debt of $498.4 million, the enterprise is worth about $580.8 million, nearly seven times equity. The multiple itself is not high, but it rests on EBITDA that does not convert into free cash flow.
We cannot compare it with its own three-year history: the facts contain no three-year average. Even without it, negative free cash flow of $10.1 million over nine months and interest expense of $43.1 million over the same period leave no room for a premium.
The price closed at $2.05 before the release, rose 3.4% on the day and has held that level since. The reaction was muted: the market saw EBITDA growth but neither profit nor positive cash flow.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 0.08 bn USD |
| EV/EBITDA (LTM) | 6.2 |
| Net debt / EBITDA (LTM) | 5.28 |
| Operating cash flow (LTM) | 0.02 bn |
| ROE | 5.9% |
| Dividend yield (12m) | 0.9% |
Bottom line
The strong side of the report is sulfur and lubricants: they delivered almost all of the EBITDA growth, and without them the quarter would have been noticeably weaker. The weak side is fertilizer and terminals, plus interest expense that absorbs all of operating profit. Revenue rose 37.3%, but the margin fell to 10.2% and free cash flow stayed negative. At 6.15x EV/EBITDA and a dividend yield below 1%, the unit is fairly valued but without a cushion. Verdict: neutral – an improvement needs sustained EBITDA growth in sulfur and lubricants and at least zero free cash flow.