Core Natural Resources' (CNR) operations have seen meaningful improvements amid rising EBITDA and decreased unit costs, but the company's contracting position may cap its earnings leverage in 2027, UBS said in a note emailed Wednesday.

The company still offers the "strongest near-term buyback among US coal producers" but much of the company's operational recovery seems to be reflected in its valuation, the note said.

UBS noted that the company saw an over 15% share price gain in the last month and over 35% in the last month.

The investment firm said it still expects the company's adjusted EBITDA to rise to about $1.09 billion in 2028, versus consensus estimates of $1.03 billion, but its "operational stability is now less compelling given the elevated trading multiple."

UBS said it is "constructive on the quality of the asset base and capital returns, but see the risk-reward now as more balanced following the stock's strong run."

UBS downgraded the company to neutral from buy and increased its price target to $105 per share from $101.

Price: 94.50, Change: +2.47, Percent Change: +2.68