The Whitehaven Coal Ltd (ASX: WHC) share price has had a strong year, climbing roughly 25% year to date and recently trading around $7.75. For a stock many investors had written off during the coal downturn, that's been an impressive rebound.
The obvious question now is whether Whitehaven still has more to offer, or if most of the upside has already been captured.
What's driving the strength?
A big part of Whitehaven's recent run has come down to execution. The company's September quarter update showed production and costs broadly tracking within guidance, while realised coal prices remained well above long-term averages.
Whitehaven reported managed run-of-mine production of 9 million tonnes for the quarter, with managed sales of 7.5 million tonnes. Unit costs were in the top half of FY26 guidance, but management reiterated expectations for costs to improve over the remainder of the year as volumes lift and cost savings flow through.
The company is also making progress on its cost-out program, targeting $60 million to $80 million in annualised savings by June 2026.
Coal prices still doing the heavy lifting
Thermal and metallurgical coal prices have come off their peaks, but they remain supportive. According to Trading Economics, Newcastle thermal coal prices are still sitting comfortably above pre-2021 levels, helping underpin margins for low-cost producers like Whitehaven.
That pricing environment has allowed Whitehaven to strengthen its balance sheet. Net debt sat around $800 million at the end of September, a manageable level given the current cash generation from the company.
What are brokers saying?
Broker views are mixed, which is fairly typical for coal stocks at this point in the cycle.
Jefferies recently lifted its price target to $8, while Bell Potter sits around $7. Macquarie trimmed its target to about $7 but still acknowledges Whitehaven's solid operational performance. Morgans and Ord Minnett have also made modest adjustments to their targets, reflecting more normalised coal prices rather than company-specific issues.
Is it still a buy?
Whitehaven is never going to be a set-and-forget investment. Coal prices are volatile, sentiment can turn quickly, and long-term demand remains uncertain.
That being said, the company is in a much stronger position than it was a year ago. Production is stabilising, costs are coming down, and the balance sheet looks far healthier. Ongoing buybacks and the potential for shareholder returns also support the case.
My take
After a 25% rally, Whitehaven is no longer a deep-value turnaround play. However, for investors comfortable with commodity exposure, it still offers leverage to coal prices, enhances operational momentum, and maintains a disciplined approach to costs.
At these levels, it's probably no longer cheap, but it's not obviously expensive either. But as long as coal prices remain supportive and execution stays on track, Whitehaven can continue to earn its place on my watchlist.
