As of July 26, 2023, Arch Resources (ARCH), a leading player in the Basic Materials sector and the Coking Coal industry, is showing promising signs of potential upside. With a day typical price of $119.09, the company's stock is under Wall Street's target price of $168.33 and the analyst's highest estimated target price of
$195. Arch Resources, which has been publicly traded since the 11th of August 1988, has shown a strong performance with a 52-week high of
$163.87 and a 52-week low of $98.74. The company's 50-day moving average stands at $114.04, indicating a steady upward trend. The company's EPS estimate for the current year is $33.25, with a quarterly estimate of $9.64. These figures, coupled with a payout ratio of 0.4582, suggest a healthy financial status. The company has also seen an accumulation distribution of 56.5K, further indicating a positive trend. However, it's worth noting that Arch Resources has a short ratio of 3.75, with 1.8M shares short, up from 1.5M shares short the prior month. This indicates a level of skepticism among some investors. Despite this, the overall
analyst consensus for Arch Resources is a 'Strong Buy', with two strong buy recommendations. The naive expected forecast value for the stock is $129.22, with a possible upside price of $131.45 and a possible downside price of $126.98. Given these factors, there is a potential for significant upside for Arch Resources by August 2023. However, as always, investors should conduct their own due diligence before making any investment decisions. Arch Resources' Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) have been on an upward trend compared to previous years. The EBITDA for the last year was reported at $1.23 billion. The current Earnings Before Tax (EBT) is projected to increase to approximately $1.2 billion, while Average Equity is expected to decrease to less than $1 billion. The aim of this report is to provide traders with our perspective on the future value of Arch Resources. We will focus on the factors that could potentially make Arch Resources a game-changer for traders.
There are currently many different techniques concerning forecasting the market as a whole as well as
predicting future values of individual securities such as Arch Resources. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the
market sentiment and impact your forecasting results.
Predictive Modules for Arch Resources
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Arch Resources' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Arch Resources. Your research has to be compared to or analyzed against Arch Resources' peers to derive any actionable benefits. When done correctly, Arch Resources' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Arch Resources.
How important is Arch Resources's Liquidity
Arch Resources
financial leverage refers to using borrowed capital as a funding source to finance Arch Resources ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Arch Resources financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Arch Resources' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Arch Resources' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Arch Resources's total debt and its cash.
Arch Resources Gross Profit
Arch Resources Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Arch Resources previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Arch Resources Gross Profit growth over the last 10 years. Please check Arch Resources'
gross profit and other
fundamental indicators for more details.
Is Arch Resources valued properly by the market?
Arch Resources currently demonstrates below-average downside deviation. It has Information Ratio of -0.02 and Jensen Alpha of -0.08. However, we advise investors to further question Arch Resources expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Arch Resources' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Arch Resources' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Returns Breakdown
| Return on Investment | 85.98 |
| Return on Assets | 0.63 |
| Return on Equity | 1.23 |
| Return Capital | 0.68 |
| Return on Sales | 0.32 |
Arch Resources (NYSE: ARCH), a leading player in the coking coal industry, has shown promising signs of potential upside. With a market capitalization of
$2.26 billion and a robust EBITDA of
$1.25 billion, the company's
financial health is solid.
The company's EPS estimate for the current year stands at 33.25, indicating strong profitability. Furthermore, the company's net income of $1.33 billion and a profit margin of 0.34% underscore its ability to generate substantial profits. The company's stock has a 52-week high of 163.87 and a low of 98.74, with a Wall Street target price of 168.33, suggesting a significant potential upside. The company's shares are largely owned by institutions, at 85.39%, indicating strong institutional confidence in the company's prospects. Arch Resources' operating margin of 0.29% and a payout ratio of 0.4582 further demonstrate its financial stability. The company's low debt-to-equity ratio of 0.15% indicates a conservative approach to debt, which reduces financial risk. In conclusion, given the company's strong
financial performance and promising market indicators, Arch Resources presents a potential upside for investors by August 2023. However, investors should also consider the company's risk-adjusted performance of 0.0136 and a beta of 0.71, indicating moderate market volatility. .
Momentum Analysis of Arch Resources suggests possible reversal in August
Arch Resources, a significant entity in the US coal industry, has recently exhibited a downside deviation of 2.45. This suggests an elevated risk level associated with the stock, indicating a higher likelihood of negative returns. However, this increased volatility could potentially hint at a reversal in the stock's trajectory in August. Investors should keep a close eye on the stock, as this could offer a strategic opportunity for those aiming to capitalize on market fluctuations. As of July 27th, Arch Resources exhibits a risk-adjusted performance of 0.0136, and a Mean Deviation of 1.79. The
technical analysis of Arch Resources provides a methodology to utilize historical prices and volume patterns to determine a pattern that approximates the direction of the company's future prices. In other words, this information can be used to ascertain if the company will indeed reflect its model of historical prices and volume momentum, or if the prices will eventually revert. We have been able to dissect nineteen technical drivers for Arch Resources, which can be compared to its
competitors. Please verify Arch Resources' Jensen Alpha, semi-variance, and the relationship between the standard deviation and value at risk to determine if Arch Resources is priced correctly, assuming the market reflects its regular price of 121.94 per share. Given that Arch Resources has a Jensen Alpha of -0.08, we recommend you to validate Arch Resources' current market performance to ensure the company can sustain itself in the future.
Our Final Take On Arch Resources
When is the right time to buy or sell Arch Resources? Buying stocks such as Arch Resources isn't very hard. However, what challenging for most investors is doing it at the right time. Proper
market timing is something most people cannot do without
sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
In closing, as of the 27th of July 2023, our latest 90 days buy vs. sell advice on the firm is
Strong Hold. We believe Arch Resources is
undervalued with
very small odds of financial turmoil for the next two years.
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Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Arch Resources. Please refer to our
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