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Alliance Resource Partners (ARLP) Could Be 74% Undervalued As Analysts Lift EPS Views

Simply Wall St · 1d ago

Alliance Resource Partners (ARLP) is back in focus after analysts recently raised earnings per share estimates and assigned the stock a Zacks Rank #1. This shift highlights changing expectations around the coal producer’s profit outlook.

See our latest analysis for Alliance Resource Partners.

Alliance Resource Partners’ recent analyst upgrades come as the stock trades at US$24.59, with a share price return of 5.58% year to date and a very large 5 year total shareholder return of around 7x. This suggests momentum has been building over the longer term, even as shorter term moves have been more muted.

If you are reassessing your energy and resources exposure after this Alliance Resource Partners update, it could be a useful moment to scan 33 elite gold producer stocks for other potential opportunities in the space.

Given Alliance Resource Partners’ strong multi year shareholder returns and recent analyst optimism, the key issue now is simple: does the current price still offer an appealing margin of safety, or is most of the reward already reflected in the valuation?

Preferred P/E of 13x: Is it justified?

On simple earnings metrics, Alliance Resource Partners looks inexpensive, with the stock trading on a P/E of around 13x at a last close of $24.59 while also being described as trading at good value compared with peers and the broader US Oil and Gas industry.

The P/E ratio compares the current share price to earnings per share, so it effectively tells you how many dollars investors are willing to pay for each dollar of current earnings. For a coal focused business with established operations and positive net income, this is a common way for investors to frame how much of the existing profit stream is already priced in.

Here, the picture is quite supportive for Alliance Resource Partners. The stock is flagged as good value versus the US Oil and Gas industry average P/E of 13.6x, and also versus a broader peer average of 19.7x, which suggests the market is applying a lower earnings multiple than many comparable companies. On top of that, internal fair value work points to an estimated fair P/E closer to 17x, implying there is a gap between where the market currently prices each dollar of earnings and where that multiple could plausibly move if sentiment or expectations shift.

Explore the SWS fair ratio for Alliance Resource Partners

Result: Price-to-earnings of 13x (UNDERVALUED)

However, Alliance Resource Partners still faces potential pressure from coal demand uncertainty and any shift in analyst sentiment if earnings or royalty streams disappoint relative to expectations.

Find out about the key risks to this Alliance Resource Partners narrative.

Another View: What the SWS DCF Model Says About Alliance Resource Partners

While the 13x P/E suggests Alliance Resource Partners could be cheap on earnings, the SWS DCF model presents an even starker picture. With the stock at $24.59 compared with an estimated future cash flow value of $93.72, this method points to very deep undervaluation. Which signal should carry more weight for you?

Look into how the SWS DCF model arrives at its fair value.

ARLP Discounted Cash Flow as at Jul 2026
ARLP Discounted Cash Flow as at Jul 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Alliance Resource Partners for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With Alliance Resource Partners sending mixed signals on valuation and sentiment, it makes sense to move quickly and review the underlying data yourself. To weigh the balance between concerns and optimism around this stock in one place, take a closer look at the 4 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Alliance Resource Partners?

If Alliance Resource Partners has sharpened your appetite for opportunities, do not stop here. Use the Simply Wall St screener to uncover other stocks that might suit your approach.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.