SunCoke Energy SXC

NYSE SXC

$10.19 -0.04 (-0.39%)

As of: Sep 9, 2026 · 3:59 PM EDT

Key Stats

Market Cap874.57 Mn

P/E-17.67

P/S0.46

Div. Yield0.05

Total Debt (Qtr)653.90 Mn

Revenue Growth (1y) (Qtr)9.49

Add ratio to table…

About

SunCoke Energy, Inc. is the largest independent producer of high quality coke in the Americas measured by annual tons of coke produced. The company operates five cokemaking facilities in the United States and one facility in Brazil under agreement with ArcelorMittal Brazil. In addition it runs an industrial services business that provides material handling mixing and logistics services for coal coke steel power and other bulk customers. SunCoke Energy, Inc. serves the…

The company generates revenue primarily from the sale of blast furnace coke and foundry coke under long term take or pay agreements with steel producers. It also sells noncontracted coke into spot and export markets. Revenue from the industrial services segment comes from fees for material handling mixing transloading storage and slag handling services provided on a per ton basis.

The company operates through the following segments: Domestic Coke and Industrial Services.

Domestic Coke includes the company’s owned and operated cokemaking facilities in Indiana Harbor Granite City Jewell Haverhill and Middletown which produce blast furnace coke using heat recovery technology that captures waste heat to generate steam and electricity for sale. The segment also produces foundry coke at the Jewell plant and sells steam and electricity generated from the cokemaking process.
Industrial Services provides material handling mixing transloading and storage services at terminals such as Convent Marine Terminal Kanawha River Terminal and Lake Terminal as well as on site slag handling scrap processing and mill services at numerous locations in the United States Brazil Slovakia and Spain.

SunCoke Energy, Inc. is the largest independent coke producer in the Americas and holds about 38 percent of the U. S. blast furnace coke market capacity. Its competitors include merchant coke producers from countries such as China Colombia and Indonesia as well as captive coke plants owned by integrated steel companies. Competitive advantages stem from its proprietary heat recovery technology which yields higher quality coke lower emissions and the ability to sell generated steam and electricity. The company’s long term take or pay contracts provide stable cash flows and reduce exposure to spot price volatility.

The company’s customers include major steel producers such as Cleveland Cliffs Steel Holding Corporation Cleveland Cliffs Steel LLC collectively referred to as Cliffs Steel United States Steel Corporation and Algoma Steel Inc. It also supplies coke to ArcelorMittal Brazil under operating agreements. Industrial services customers comprise steel mills coal producers power generators and other bulk material handlers across North America and internationally.

Investment Thesis

▲ Bull case

SunCoke Energy (SXC) is positioned to benefit from a structural shift in global coal demand driven by export market strength, particularly thermal coal exports from its CMT terminal, which management acknowledged as experiencing higher pricing and demand due to geopolitical factors and oil and gas market challenges, creating a tailwind for Industrial Services volumes that is not being fully priced into current guidance, as the company reaffirmed its full-year Industrial Services adjusted EBITDA range of $90 million to $100 million despite clear sequential improvement in terminal handling volumes to 5.6 million tons in Q1 FY26 and expectations of continued market improvement throughout 2026, suggesting potential upside to EBITDA if export thermal coal demand sustains or grows beyond current assumptions.
The seamless integration of the Phoenix business, acquired in late 2025, is delivering under-the-radar operational synergies that are not yet reflected in reported results, as management noted ongoing drag costs from IT system integration and software merging that are suppressing current Industrial Services adjusted EBITDA, with expectations that these costs will diminish through the remainder of 2026, allowing Phoenix to contribute more fully to segment profitability and enabling the company to exceed its current full-year Industrial Services guidance range as these integration benefits materialize in H2 FY26.
SunCoke’s strategic focus on deleveraging using strong free cash flow generation presents an underappreciated catalyst for shareholder value, as the company generated $72.7 million in operating cash flow in Q1 FY26, used $26 million for debt paydown, and reiterated its goal to achieve gross leverage below 3x by end of 2026, a target that, if met, would significantly reduce financial risk and potentially trigger a re-rating of the stock by investors who currently discount the shares due to balance sheet concerns, despite the company’s ample liquidity of $262 million and consistent dividend history of 27 consecutive quarters.

SunCoke Energy (SXC) is positioned to benefit from a structural shift in global coal demand driven by export market strength, particularly thermal coal exports from its CMT terminal, which management acknowledged as experiencing higher pricing and demand due to geopolitical factors and oil and gas market challenges, creating a tailwind for Industrial Services volumes that is not being fully priced into current guidance, as the company reaffirmed its full-year Industrial Services adjusted EBITDA range of $90 million to $100 million despite clear sequential improvement in terminal handling volumes to 5.6 million tons in Q1 FY26 and expectations of continued market improvement throughout 2026, suggesting potential upside to EBITDA if export thermal coal demand sustains or grows beyond current assumptions.
The seamless integration of the Phoenix business, acquired in late 2025, is delivering under-the-radar operational synergies that are not yet reflected in reported results, as management noted ongoing drag costs from IT system integration and software merging that are suppressing current Industrial Services adjusted EBITDA, with expectations that these costs will diminish through the remainder of 2026, allowing Phoenix to contribute more fully to segment profitability and enabling the company to exceed its current full-year Industrial Services guidance range as these integration benefits materialize in H2 FY26.
SunCoke’s strategic focus on deleveraging using strong free cash flow generation presents an underappreciated catalyst for shareholder value, as the company generated $72.7 million in operating cash flow in Q1 FY26, used $26 million for debt paydown, and reiterated its goal to achieve gross leverage below 3x by end of 2026, a target that, if met, would significantly reduce financial risk and potentially trigger a re-rating of the stock by investors who currently discount the shares due to balance sheet concerns, despite the company’s ample liquidity of $262 million and consistent dividend history of 27 consecutive quarters.

▼ Bear case

SunCoke Energy (SXC) faces persistent and underappreciated operational fragility in its Domestic Coke segment, as evidenced by management’s admission that severe winter weather and the Middletown turbine failure caused roughly a $10 million headwind in Q1 FY26, with expectations of continued power production disruption at Middletown through most of Q2, implying that the full-year Domestic Coke adjusted EBITDA guidance of $162 million to $168 million is highly dependent on favorable weather and timely equipment repairs, which are not guaranteed and represent a material risk to earnings if Q2 weather remains adverse or Middletown repair timelines slip, potentially preventing the company from making up lost production as optimistically projected.
The company’s reliance on spot market pricing and export demand for thermal coal at its terminals introduces significant volatility that is not adequately reflected in its forward-looking statements, as management conceded they do not break out thermal export volumes at CMT and rely on historical ratios for guidance, leaving investors exposed to abrupt reversals in international coal demand driven by fluctuating global energy policies, currency shifts, or sudden improvements in oil and gas supply that could quickly erase the current demand tailwind, despite management’s optimism about market conditions improving throughout 2026.
SunCoke’s capital allocation strategy, while emphasizing debt reduction and dividends, may be constraining necessary reinvestment in long-term competitiveness, as the company spent only $17 million on CapEx in Q1 FY26 despite emphasizing the need to maintain operational excellence and assess growth opportunities, raising concerns that underinvestment in maintenance or efficiency upgrades—particularly in aging cokemaking assets like Indiana Harbor and Jewel Foundry—could lead to declining reliability or higher operating costs over time, undermining the sustainability of its cash flow generation even as it prioritizes deleveraging and shareholder returns.

SunCoke Energy (SXC) faces persistent and underappreciated operational fragility in its Domestic Coke segment, as evidenced by management’s admission that severe winter weather and the Middletown turbine failure caused roughly a $10 million headwind in Q1 FY26, with expectations of continued power production disruption at Middletown through most of Q2, implying that the full-year Domestic Coke adjusted EBITDA guidance of $162 million to $168 million is highly dependent on favorable weather and timely equipment repairs, which are not guaranteed and represent a material risk to earnings if Q2 weather remains adverse or Middletown repair timelines slip, potentially preventing the company from making up lost production as optimistically projected.
The company’s reliance on spot market pricing and export demand for thermal coal at its terminals introduces significant volatility that is not adequately reflected in its forward-looking statements, as management conceded they do not break out thermal export volumes at CMT and rely on historical ratios for guidance, leaving investors exposed to abrupt reversals in international coal demand driven by fluctuating global energy policies, currency shifts, or sudden improvements in oil and gas supply that could quickly erase the current demand tailwind, despite management’s optimism about market conditions improving throughout 2026.
SunCoke’s capital allocation strategy, while emphasizing debt reduction and dividends, may be constraining necessary reinvestment in long-term competitiveness, as the company spent only $17 million on CapEx in Q1 FY26 despite emphasizing the need to maintain operational excellence and assess growth opportunities, raising concerns that underinvestment in maintenance or efficiency upgrades—particularly in aging cokemaking assets like Indiana Harbor and Jewel Foundry—could lead to declining reliability or higher operating costs over time, undermining the sustainability of its cash flow generation even as it prioritizes deleveraging and shareholder returns.

Product and Service Breakdown of Revenue (2025)

Peer group

Peer Comparison

Companies in the Steel

S.No.	Ticker	Company	match	Market Cap	P/E	P/S	Total Debt (Qtr)
1	TX	Ternium S.A.	primary	114.02 Bn	278.99	7.12	7.81 Bn
2	NUE	Nucor Corp	primary	58.75 Bn	18.10	1.63	7.10 Bn
3	STLD	Steel Dynamics Inc	primary	34.64 Bn	21.77	1.69	4.20 Bn
4	GGB	Gerdau S.A.	primary	10.07 Bn	23.15	0.77	1.97 Bn
5	CMC	COMMERCIAL METALS Co	primary	7.63 Bn	12.82	0.86	3.40 Bn
6	PKX	Posco Holdings Inc.	primary	4.73 Bn	5.21	0.13	0.74 Bn
7	SIM	GRUPO SIMEC, S.A.B. de C.V.	primary	4.41 Bn	49.98	2.67	0.08 Bn
8	SID	National Steel Co	primary	1.76 Bn	-1.89	0.10	0.37 Bn

SunCoke Energy SXC

About

Investment Thesis

Segments Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer Comparison

Create an account

Sign In

Reset Password