SXC Should I Buy
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SunCoke Energy Inc (SXC) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the stock shows oversold conditions and potential for a short-term rebound, the company's weak financial performance, declining margins, and lack of significant positive catalysts make it a hold rather than a buy. The investor's capital would be better allocated to assets with stronger growth potential and stability.
The stock is currently oversold with an RSI of 13.715, indicating potential for a short-term rebound. However, the MACD is negatively expanding (-0.211), and moving averages are converging, suggesting no clear upward momentum. The pre-market price is $6.43, which is below the key support level of $6.643, indicating potential further downside.
The company also exceeded revenue expectations in Q4 2025, despite challenges.
Gross margins declined sharply to 2.85%, and adjusted EBITDA fell below estimates. Analysts have lowered the price target from $10 to $9, reflecting reduced confidence. Additionally, there are no significant hedge fund or insider trading trends, and trading sentiment is mixed.
In Q4 2025, revenue dropped slightly by 1.19% YoY to $480.2M, but net income plummeted by 461.18% YoY to -$85.6M. EPS also fell significantly to -$1.00, and gross margins declined by 72.78% YoY. The company anticipates 2026 adjusted EBITDA between $230M and $250M, with capital expenditures of $90M to $100M.
B. Riley has downgraded the price target from $10 to $9, maintaining a Neutral rating. This reflects reduced confidence in the company's near-term growth potential.
