A Look at Ramaco Resources Just Ahead of Earnings

I just looked back and realized that I had not covered the "Stocks Under $10" name and Sarge-folio holding Ramaco Resources (METC) since late December. 

That's probably because the stock spiked sharply and sold off since that time, without showing me anything distinctly technical that I could go off of. At that time, METC was trading around $17.30. The stock closed at $16.56 on Friday night. I gave readers a $24 target price at that time.

The stock did peak at $28.67. Hopefully those long the stock did take something off on that spike. I did inform publicly when making a sale in the $33s back in late October. Let's see if we can get back on track with this name ahead of the firm's Q4 earnings later this week.

With those numbers due on Wednesday after the closing bell, Wall Street is looking for an adjusted EPS of -$0.22 on revenue of roughly $143.5 million. Those numbers, if accurate, would not really compare well to the $0.06 reported for Q4 2024, while reflecting a year-over-year sales contraction of 16%.

Reminder

Ramaco is a developer of metallurgic coal in Southern West Virginia and Virginia as well as a developer of coal, rare earths and other critical minerals in Wyoming. The firm is based in Lexington, Kentucky. 

Ramaco has four active metallurgic coal mining complexes in the central Appalachia region and one coal mine, and one rare earth development facility close to Sheridan, Wyoming. The company also has control over larger mineral deposits near Sheridan, which is part of the firm's initiative to recover rare earths and critical minerals. The Knox Creek site, which is one of four, includes 64.050 acres of firm-controlled mineral rights. This is why we are in this name.

On Friday Evening...

Jefferies analyst Christopher LaFemina, who is rated at five stars (out of five) by TipRanks, upgraded Ramaco Resources to a "Buy" rating from "Hold." 

LaFemina did reduce his target price to $30 from a less realistic $33 at that time. He cited the firm's valuation following the recent share weakness for the upgrade. Lafemina sees "upside risk" to coal price assumptions and escalating geopolitical risks relating to critical minerals as positives for Ramaco.

The Chart​

It's not perfect, but it is very possible that what we see​ above is a double-bottom pattern of bullish reversal with a $28 pivot. I am going to use that pivot as my new target given that it's quite a way off from the stock's last sale. For that reason, I will be using the 200-day SMA, currently at $21 as my pivot. 

We will reconnect on this name after earnings later this week. For now, the panic point would be a new post December low, which was $13.87.

At the time of publication, Guilfoyle was long METC equity.