New Hope Corp Ltd (ASX: NHC) shares are edging lower today.
Shares in the S&P/ASX 200 Index (ASX: XJO) coal stock closed yesterday trading for $4.63. In afternoon trade on Tuesday, shares are changing hands for $4.62 apiece, down 0.2%.
Over the past month, New Hope shares have gained 13.3% amid a roughly 10% increase in coal prices. Thermal coal is trading for US$116 per tonne, near its highest level in 12 months.
Taking a step back, shares in the ASX 200 coal stock remain down 5.5% since this time last year. Though those losses will have been more than erased by the 34 cents a share in fully-franked dividends New Hope paid out over this time.
New Hope stock currently trades on a fully-franked trailing dividend yield of 7.4%.
Which brings us back to…
Why New Hope shares are tipped to outperform in 2026
Baker Young's Toby Grimm recently ran his slide rule over the Aussie coal miner (courtesy of The Bull).
Citing the first reason he has a buy rating on New Hope shares, Grimm said, "The extension of Origin Energy's Eraring coal fired power station is a reminder that demand for thermal coal is likely to remain robust for longer than many investors believe."
Origin Energy Ltd (ASX: ORG) reported that extension on 20 January, noting it would extend the operation of all four units of the coal-fired power station from 19 August 2027 to 30 April 2029, "to support energy supply in NSW through the energy transition".
Commenting on that decision, Origin CEO Frank Calabria said:
We've taken the decision to extend Eraring's operations after assessing a range of factors, including the needs of our customers, market conditions and the important role the plant plays in the NSW energy system.
Among other reasons he's positive on the stock, Baker Young's Grimm also pointed to the strong growth New Hope reported at its latest quarterly results:
New Hope group saleable coal production of 2.7 million tonnes for the quarter ending October 31, 2025 was up 7.1% on the previous quarter. Underlying EBITDA [earnings before interest, tax, depreciation and amortisation] of $107.9 million for the quarter was up 15.5% on the prior quarter.
As for the third reason New Hope could outperform in the year ahead, Grimm said, "New Hope has a strong balance sheet, and we feel the market is undervaluing NHC's growth potential through the New Acland stage 3 development."
The new Acland stage 3 development is an approved expansion of New Hope's thermal coal mine in Queensland.
And the fourth reason you might want to buy New Hope shares today, according to Grimm, "Recently trading on a modest forecast earnings multiple in fiscal year 2026 and an attractive fully franked dividend yield, the stock screens as attractive."
