Alpha Metallurgical (AMR) Drops 4.49% on Lowered 2025 Coal Guidance

Alpha Metallurgical (AMR) shares fell 4.49% today, reaching their highest level since May 2025 with an intraday gain of 3.84%.

The strategy of purchasing Alpha Metallurgical Resources (AMR) shares upon reaching a recent high and holding for one week yielded modest returns but came with considerable volatility and risk. Here's a backtested analysis based on the provided data:

Recent High Point: The recent high for AMR shares was $326.69, which was significantly higher than the current trading price of $111.83.

Purchase Price: Assuming the purchase was made at the recent high of $326.69, the initial investment would be $326.69 per share.

Current Price: The current price is $111.83, which represents a decline of $214.86 from the recent high.

Loss Calculation: The percentage loss due to the decline in price is substantial, with a direct loss of $214.86 out of the initial investment of $326.69, translating to approximately 65.77% loss.

Holding Performance: If you held the shares for one week without any intervening transactions, the return would be negative, reflecting a loss rather than a gain.

Implied Return: The average target price from analysts is $145.50, suggesting a potential upside from the current price. However, this target is still below the recent high, indicating that even if the price were to increase, it might not recover the initial purchase price in full.

Volatility and Risk: The strategy highlights the volatility of coal mining stocks, which can experience significant price fluctuations due to market conditions, industry trends, and company-specific factors.

In conclusion, this strategy of buying at a recent high and holding for one week resulted in a substantial loss based on the backtested data. The negative return and high volatility underscore the risks associated with such a strategy, especially in the coal mining sector, where prices can be highly variable. This analysis does not include potential dividends or dividend reinvestments, which could slightly alter the return figures but would not change the overall negative outcome of the holding period.

Alpha Metallurgical Resources (AMR) has adjusted its 2025 metallurgical coal shipment guidance, reducing it by 5.5% to a range of 13.8–14.8 million tons. This revision is primarily due to weak demand and pricing in the market, which has had a notable impact on the company's stock performance. The reduction in shipment guidance reflects the current market conditions and the challenges faced by the company in maintaining its previous projections. This adjustment is a significant factor influencing the stock price, as investors reassess the company's outlook in light of the revised guidance.