Stanmore Resources Ltd (ASX: SMR) has been one of the best ASX materials stocks to own in 2026.
Since the start of the year it has risen an impressive 22.08%.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 2.36% in the same period.
However, yesterday this ASX materials stock fell 2.33%.
This was despite reporting a record December quarter coal production and strong cash generation on January 27.
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Investor sell-off
Stanmore Resources is an Australian coal producer with operations and exploration projects in the Bowen and Surat Basins in central and southern Queensland.
It is one of Australia's largest suppliers of metallurgical coals to global markets with three major assets including the Isaac Plains complex and the Poitrel and South Walker Creek coal mines.
Stanmore also has a 50% ownership stake in the Millennium and Mavis Downs mines.
Its most recent quarterly report included:
- Record quarterly run-of-mine (ROM) coal production of 6.0 million tonnes (Mt), saleable production of 3.9Mt, and sales of 4.0Mt
- Full-year saleable coal production of 14.0Mt.
- Net debt reduced by US$57 million in Q4
- Total liquidity climbed to US$482 million at 31 December 2025
- Serious Accident Frequency Rate for the year was 0.33, significantly below industry benchmarks
- Average sales price achieved was US$133 per tonne, with a late-quarter rally in coal markets
Despite these results, investors have been trimming their positions in this ASX materials stock over the last couple of days.
The stock price has dropped almost 4% since Tuesday's open.
What's Morgans' view?
The team at Morgans have provided fresh guidance for this ASX materials stock following its quarterly results.
The broker highlighted that Stanmore Resources delivered record quarterly results in 4Q25 across run-of-mine (6.0Mt), saleable product (3.9Mt) and product sales (4.0Mt) whilst dealing with unseasonably high rainfall.
Increased sales helped operational cash flow that saw total cash increase to US$212m and net debt reduced by US$57m to US$33m.
Morgans said the Isaac Downs site is expected to deliver materially lower output in 2026 as mining progresses deeper into the pit and approaches less economic zones.
Poitrel's production is also forecast to ease after a standout 2025 performance.
Based on this guidance, Morgans has downgraded its recommendation to TRIM.
It also has a revised target price of $2.95ps.
It would appear based on this target that this ASX materials stock is fully valued, after closing yesterday at $2.93 per share.
Our target for SMR is set at a discount to NPV to reflect opacity in the short-term coal price outlook.
