ARLP Heads Into Q3 Print With Cost-to-Borrow Spike and Bullish Options Lean

ARLP reports Q3 results on October 26 with one data point standing out from the rest: borrowing costs have surged roughly seven-fold in a month, even as short sellers remain a marginal presence in the stock.

The cost-to-borrow story is striking in isolation. At 5.03%, the annualised rate is more than six times what it was at the start of October, when the rate sat below 1%. That move happened without a meaningful build in short positions: short interest is only 1.17% of free float, edging down roughly 2% on the week. Availability remains exceptionally loose at 2,892%, meaning there are nearly 30 shares available to borrow for every one currently lent out. The CTB spike therefore reflects a localised demand shift rather than a broad short campaign, and the ORTEX short score of 38.6 sits in the lower third of the universe, confirming the bear pressure is modest. Options positioning reinforces the cautiously positive mood: the put/call ratio of 0.37 is slightly below its 20-day average, near the call-heavy end of its 52-week range.

The bull and bear cases heading into the print centre on volume, costs and contract coverage. Bulls point to a guidance raise of 0.5 million tons for the full year, driven by Illinois Basin shipment growth, and near-complete forward contracting at 96% for 2025. Bears focus on cost creep: higher-than-expected expenses per ton, partly from a longwall move at the Tunnel Ridge complex, pushed full-year adjusted EBITDA estimates down to around $702 million. The two analysts covering the name both rate it buy, with targets in the $29 to $30 range against a current price of $26.14. That roughly 14% gap to consensus implies analysts believe the cost headwinds are manageable, though none of these notes are recent, the most recent coverage initiation was September 2025.

The company's own workforce data from the Mine Safety and Health Administration paints a picture of a leaner operation. Average employees fell for three consecutive quarters to 2,939 as of April 2026, and employee hours worked in Q2 2026 were the lowest in four years at 1.72 million hours. The MSHA dataset has not been shown to lead ARLP's reported financials, so these figures are operational context, not a signal for the print. What they do suggest is that Alliance has been running a tighter headcount through a period of volume growth, which makes the cost-per-ton trajectory a central question for the quarter. On the ownership side, Energy Income Partners added 307,000 units in the quarter ending September 30, a notable increase, while Morgan Stanley Investment Management trimmed its position by 1.58 million shares, the two largest recent institutional moves pointing in opposite directions.

Retail attention has also picked up, with Wikipedia and ORTEX page views running at a z-score of 3.2 above the stock's own 90-day baseline, the highest attention reading in the dataset. The Q3 print is therefore less a test of whether Alliance is growing and more a test of whether management has turned the corner on costs, at a price where the distribution yield and contract book are already doing much of the valuation work.