REX
T3REX American Resources Corporation
OverviewREX American Resources Corporation produces ethanol, a biofuel, and valuable co-products like distillers grains for animal feed and corn oil. The company is act
REX American Resources Corporation produces ethanol, a biofuel, and valuable co-products like distillers grains for animal feed and corn oil. The company is actively expanding its ethanol production capacity and advancing carbon capture projects, including Class VI well permitting. REX is recognizing 45Z clean fuel tax credits, contributing to its record Q1 2026 profitability, and maintains a strong, debt-free financial position.
- What They Do (Plain English & Analogies)
- REX American Resources is like a specialized farm and refinery rolled into one, primarily focusing on turning corn into useful products. Their main business is making ethanol, a type of alcohol used as a cleaner-burning fuel, often mixed with gasoline – imagine them as a large-scale distillery for fuel. Beyond ethanol, they also create valuable byproducts from the corn, such as animal feed (distillers grains) and corn oil, which can be used in food or other industrial applications. They are also heavily investing in technology to capture and store the carbon dioxide produced during their manufacturing process, aiming to make their fuel even more environmentally friendly, almost like a 'carbon vacuum cleaner' for their operations.
- Very Brief History
- REX American Resources Corporation was founded in 1980. Initially known as REX Stores Corporation, the company was involved in the retail industry. It strategically shifted its business focus to energy in 2009 and subsequently changed its name to REX American Resources Corporation in 2010. The company has been publicly traded since 1984 and listed on the New York Stock Exchange (NYSE) since 1986.
- "Street Stereotype"
- REX American Resources is generally perceived by investors and analysts as a well-managed, financially sound ethanol producer with a strong focus on operational excellence and disciplined capital allocation. The company is known for its consistent profitability, having delivered 23 consecutive quarters of positive results, and maintaining a robust balance sheet with no bank debt. There's a growing recognition of its strategic investments in carbon capture and low-carbon ethanol production, positioning it as a forward-thinking player in the renewable energy sector.
- Subsidiaries On Linked In*
- One Earth Energy, LLC — Majority-owned ethanol production plant in Gibson City, Illinois. Note: A LinkedIn search for 'One Earth Energy' reveals a different company focused on renewable energy solutions for healthcare, not related to REX's ethanol business.; LinkedIn: n/m
- NuGen Energy, LLC — Majority-owned ethanol production plant in Marion, South Dakota. Note: No distinct LinkedIn presence directly linked to REX's ethanol business was found; other entities with similar names exist in different industries.; LinkedIn: n/m
- Big River Resources West Burlington LLC — Minority ownership interest.; LinkedIn: n/m
- Big River Resources Galva LLC — Minority ownership interest.; LinkedIn: n/m
- Big River United Energy LLC — Minority ownership interest.; LinkedIn: n/m
- Big River Resources Boyceville LLC — Minority ownership interest.; LinkedIn: n/m
- Customer Sectors & Example Clients
- REX American Resources serves several customer sectors: * **Energy/Biofuels:** Customers include major fuel distributors and blenders who incorporate ethanol into gasoline. Example clients could include large energy companies like Valero or Marathon Petroleum. * **Agriculture:** For their distillers grains (DDG and MDG), customers are typically large agricultural companies, feedlots, and livestock producers using the products as high-protein animal feed. * **Food/Industrial:** Corn oil is sold to food processing companies or for use in biodiesel production. * **Environmental/Industrial (Future):** With their carbon capture initiatives, they are targeting industrial emitters who may seek carbon sequestration services from third parties. Specific client names are not disclosed in the provided transcript.
- New Customers / Segments They'Re Targeting
- REX American Resources is actively targeting new markets for exporting low-carbon ethanol, produced in facilities aiming for near-net-zero carbon emissions. Additionally, the company is positioning itself to offer third-party carbon sequestration services, leveraging the capacity of its carbon capture wells.
- Supply Chain And Sourcing Geographies
- REX American Resources' primary feedstock is corn, which they source from the abundant 'Corn Belt locations' in the United States. Their facilities are strategically located in key corn-producing states, specifically their majority-owned plants: One Earth Energy, LLC, in Gibson City, Illinois, and NuGen Energy, LLC, in Marion, South Dakota. The company benefits from strong corn production in these regions.
- Sales Geographies And Expansion Plans
- REX American Resources currently sells its products both domestically within the United States and internationally through exports. The company has noted strong ethanol export volumes, with U.S. ethanol exports to March 2026 increasing by 20% compared to the same period last year. Key export markets mentioned in previous reports include Canada for ethanol and Mexico for distillers grains, with Europe and other countries also beginning to purchase U.S. ethanol. Regarding expansion plans, REX is significantly enhancing its production capabilities through the expansion of its One Earth Energy facility to 200 million gallons per year, which is on track for completion by the end of 2026.
- How Key Themes May Help/Hurt
- The 'Supply Shock in MidEast Long '26: Food Commodities' theme presents both opportunities and risks for REX American Resources. On the positive side, persistent geopolitical conflicts and supply chain disruptions could lead to higher energy prices, making ethanol a more competitive and attractive fuel alternative. Additionally, if the prices of food commodities, including corn co-products like distillers grains and corn oil, rise due to supply shocks, REX could see increased revenue from these byproducts. However, the theme also poses a significant risk: a sustained increase in corn prices, REX's primary input, would directly raise production costs and could negatively impact profit margins.
3 Main Long-Term Bull Details
- Strong Financial Position and Capital Allocation: REX maintains a robust balance sheet with approximately $364.3 million in cash, cash equivalents, and short-term investments as of Q1 2026, and operates with no bank debt. This strong financial footing provides significant flexibility for strategic investments, such as the carbon capture and ethanol expansion projects, and resilience against market fluctuations.
- Significant Production Capacity Expansion and Efficiency: The ongoing expansion of the One Earth Energy facility to 200 million gallons per year is on track for completion by the end of 2026. This expansion is expected to substantially increase REX's ethanol production capabilities and operational efficiency, driving increased sales volumes and potential market share.
- Leadership in Low-Carbon Ethanol and Carbon Sequestration: REX is strategically positioning itself as a leader in low-carbon ethanol production through its aggressive pursuit of carbon capture and sequestration (CCS) projects and its efforts to qualify for 45Z clean fuel tax credits. The company began recognizing 45Z production tax credits in Q4 2025 and recorded an additional $7.5 million in Q1 2026, demonstrating the potential for a significant new revenue stream.
3 Main Long-Term Bear Details
- Regulatory and Permitting Dependencies: The full realization of benefits from carbon capture and 45Z tax credits is heavily dependent on favorable and timely government regulations and permit approvals. Delays in the EPA's Class VI injection well permit application and the Illinois carbon pipeline moratorium (scheduled to expire July 1, 2026) could push back project timelines and impact projected earnings.
- Commodity Price Volatility: REX's profitability is directly exposed to the volatile prices of key commodities, including ethanol (its primary product), corn (its main input), and co-products like distillers grains and corn oil. Fluctuations in these prices, driven by supply, demand, and global economic factors, can lead to unpredictable margins.
- Market Competition and Growth Challenges: The ethanol market is highly competitive, and REX's ability to expand its market share may be hampered by factors such as regulatory changes, competition from alternative energy sources, and fluctuations in consumer demand for ethanol and its by-products. This competitive environment and potential for growth stagnation could impact investor confidence.
- Competitors And Differentiation
- REX American Resources operates in a competitive ethanol market. Its competitors include PBF Energy (PBF), CVR Energy (CVI), Delek US (DK), Green Plains (GPRE), Clean Energy Fuels (CLNE), and Par Pacific Holdings. REX differentiates itself through its operational excellence, disciplined capital allocation, and a strong financial position with no bank debt. The company also emphasizes its strategic investments in carbon capture and low-carbon ethanol production, aiming to be a leader in sustainable energy.
- Recent Performance & What The Market'S Focused On
- REX American Resources reported a record profitable first quarter for fiscal 2026 on a net income per share basis, marking its 23rd consecutive profitable quarter. Net income attributable to REX shareholders was $18.5 million, or $0.56 per diluted share, compared to $8.7 million, or $0.26 per diluted share, in Q1 2025. Ethanol sales volumes reached 71.1 million gallons, with an average selling price of $1.66 per gallon. The company recognized $7.5 million in 45Z production tax credit income in Q1 2026. Gross profit for the quarter was $29.1 million, a significant improvement from $14.3 million in Q1 2025, primarily due to 45Z tax credits and reduced corn pricing. REX ended the quarter with a strong financial position, holding $364.3 million in cash, cash equivalents, and short-term investments, with no bank debt. The market is currently focused on the progress of REX's carbon capture and sequestration initiative, particularly the EPA's Class 6 injection well permit application and the expiration of the Illinois moratorium on carbon pipeline permitting in July 2026. The completion of the ethanol production capacity expansion at the One Earth Energy facility by the end of 2026 and the finalization of 45Z tax credit regulations are also key areas of market attention.
- Revenue Segments And Estimated Mix
- Ethanol Sales — Mix: ~72%; Source: Q1 2026 Transcript; Trend: Sales volumes increased slightly year-over-year, but average selling price decreased from $1.76/gallon in Q1 2025 to $1.66/gallon in Q1 2026.
- Dry Distillers Grain (DDG) Sales — Mix: ~15%; Source: Q1 2026 Transcript; Trend: Sales volumes were approximately 155 thousand tons with an average selling price of $155.86/ton, up from $145.65/ton in Q1 2025.
- Corn Oil Sales — Mix: ~8%; Source: Q1 2026 Transcript; Trend: Sales volumes were approximately 23.9 million pounds with an average selling price of $0.54/pound, up from $0.46/pound in Q1 2025.
- 45Z Production Tax Credit Income — Mix: ~5%; Source: Q1 2026 Transcript; Trend: New income stream, $7.5 million recognized in Q1 2026, reflecting a change in accounting principles to report as operating income.
- Modified Distillers Grain (MDG) Sales — Mix: ~1%; Source: Q1 2026 Transcript; Trend: Sales volumes were approximately 13.4 thousand tons with an average selling price of $76.94/ton.
- Product Brands
- {"brands":[]}
Bull / Bear DetailsREX American Resources is well-positioned for sustained growth, evidenced by its record Q1 2026 profitability and 23rd consecutive profitable quarter. The One E
Thesis
REX American Resources is well-positioned for sustained growth, evidenced by its record Q1 2026 profitability and 23rd consecutive profitable quarter. The One Earth Energy expansion, on track for 2026 completion, and initial recognition of 45Z clean fuel tax credits ($7.5M in Q1 2026) are key drivers. While regulatory delays for carbon capture and sequestration (CCS) and commodity price volatility remain challenges, strong ethanol export demand and a debt-free balance sheet provide a solid foundation. The outlook remains bullish as of June 4, 2026.
Bull case
The One Earth Energy facility expansion to 200 million gallons per year is progressing on schedule and remains on track for completion by the end of 2026. This significant capacity enhancement will solidify REX's core ethanol business, driving increased production volumes and operational efficiency, which is expected to contribute meaningfully to future performance and market share.
REX has begun recognizing significant 45Z production tax credits, recording an additional $7.5 million in Q1 2026, which contributed to its most profitable first quarter in company history. This new and growing revenue stream, coupled with ongoing monitoring of federal policy discussions, positions the company for enhanced financial performance as low-carbon fuel incentives continue to materialize.
REX maintains a strong financial position with no bank debt and $364.3 million in cash, cash equivalents, and short-term investments as of Q1 2026, providing significant flexibility for strategic investments. This robust financial health is complemented by stable domestic ethanol demand and strong international export markets, with 2026 ethanol exports to March increasing by 20% year-over-year.
Bear case
The full realization of carbon capture and sequestration (CCS) benefits faces ongoing regulatory and permitting delays. The Class 6 injection well permit application process with the EPA remains ongoing, and the Illinois carbon pipeline moratorium, though scheduled to expire July 1, 2026, still presents a near-term hurdle for project advancement and the commencement of full CCS operations.
REX's profitability remains exposed to volatile commodity prices, particularly corn (its primary input cost) and ethanol/distillers grains (output prices). Furthermore, the combined project budget for the carbon capture and ethanol expansion, currently estimated at $220-$230 million, is "subject to potential adjustments related to inflation and other market factors," posing a risk of cost overruns.
While 45Z credits are being recognized, final federal policy discussions related to carbon capture incentives under Section 45Z are ongoing, introducing potential for unforeseen complexities or changes to the credit structure or carbon intensity scoring methodology. Additionally, selling, general and administrative expenses increased significantly in Q1 2026, which could pressure margins if not managed effectively.
Bull / Bear Case
- Bear Case
- The full realization of REX's carbon capture and sequestration (CCS) benefits faces considerable regulatory and permitting delays. The EPA Class VI injection well permit application remains ongoing, and while the Illinois carbon pipeline moratorium is scheduled to expire on July 1, 2026, it still presents a near-term hurdle for project advancement. REX's profitability is highly exposed to volatile commodity prices, particularly corn input costs and ethanol output prices, which can lead to unpredictable margins. Furthermore, the ongoing federal policy discussions for 45Z credits introduce uncertainty regarding the final credit structure and carbon intensity scoring methodology. Increased selling, general, and administrative expenses in Q1 2026 also indicate potential pressure on future margins.
- Bull Case
- REX American Resources is well-positioned for sustained growth, evidenced by its record Q1 2026 profitability and 23rd consecutive profitable quarter. The One Earth Energy facility expansion, on track for completion by year-end 2026, will significantly boost ethanol production capacity and operational efficiency. The company has begun recognizing substantial 45Z production tax credits, recording an additional $7.5 million in Q1 2026, establishing a new and growing revenue stream. REX maintains a robust, debt-free balance sheet with $364.3 million in cash, providing strategic investment flexibility. This financial strength, coupled with stable domestic ethanol demand and strong international export markets (20% increase to March 2026), underpins a positive outlook for enhanced financial performance and shareholder value.
- More Compelling & Why
- Bear. While REX demonstrates strong operational performance and a healthy balance sheet, its forward P/E of 10.0x, while seemingly reasonable, does not adequately account for the significant regulatory uncertainties. The strongest bear argument is the ongoing permitting delays for Class VI wells and the pending clarity on 45Z regulations, which are critical for the company's long-term low-carbon fuel growth thesis. My view would flip to bullish if the EPA Class VI permit is finalized and favorable, clear 45Z regulations are issued, and the Illinois moratorium expires without further issues, providing a definitive path for CCS project completion and sustained credit recognition.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| Class VI Injection Well Permit Finalization and Illinois Carbon Pipeline Moratorium Expiration | Finalization of the EPA Class VI permit and the lifting of the Illinois moratorium are critical for REX to fully implement its carbon capture and sequestration project, unlocking significant environmental benefits and potential revenue streams from 45Z tax credits and third-party sequestration. | Official announcement from the EPA regarding the finalization of REX's Class VI injection well permit application. Expiration of the Illinois carbon pipeline moratorium on July 1, 2026, and subsequent submission of REX's application to the Illinois Commerce Commission. | Bullish: EPA Class VI permit finalized by June 2026 or earlier AND Illinois moratorium expires on July 1, 2026, followed by prompt application submission. Bearish: Significant delays in EPA Class VI permit (e.g., beyond Q3 2026) OR Illinois moratorium extended beyond July 1, 2026, or application faces unexpected hurdles. | Company press releases, SEC filings (10-Q, 8-K), EPA website for Class VI permit status, Illinois Commerce Commission website for pipeline permitting updates. | Illinois General Assembly website for legislative updates on moratorium, environmental news outlets covering carbon capture regulations in Illinois. | Regulatory intelligence platforms (e.g., FiscalNote, CQ Roll Call) for tracking EPA and Illinois legislative/regulatory developments. |
| One Earth Energy Facility Expansion Completion and Production Ramp-up to 200 Million Gallons Per Year (MMgy) | The expansion significantly enhances REX's ethanol production capabilities and operational efficiency, directly contributing to increased sales volumes, market share, and overall revenue growth, solidifying its core business. | Company announcements regarding the completion of the expansion project by the end of 2026. Subsequent reports on increased ethanol production volumes from the One Earth Energy facility in Q1 2027 earnings. | Bullish: Expansion completed on schedule by year-end 2026 and leads to a significant increase in production volumes (e.g., >20% year-over-year increase in Q1 2027 production from One Earth Energy) and improved efficiency. Bearish: Completion delayed beyond year-end 2026 or if production ramp-up is slower than expected, impacting future revenue and profitability. | Company press releases, SEC filings (10-Q, 10-K), earnings call transcripts. | USDA Ethanol Production reports (weekly/monthly), EIA Ethanol Production and Stocks data. | S&P Global Platts: Ethanol production capacity and utilization rates, Argus Media: Ethanol plant operational status. |
| Favorable Corn Prices and Strong Ethanol Crush Spreads | Corn is the primary input cost for ethanol production. Favorable corn prices combined with strong ethanol selling prices (reflected in crush spreads) are critical for maintaining healthy profit margins and overall financial performance. | USDA WASDE reports for corn production forecasts in key regions (Illinois, South Dakota). Corn futures prices on commodity exchanges (e.g., CBOT). Reported ethanol crush spreads. | Bullish: Average corn prices for the quarter remain below $4.50/bushel, leading to crush spreads (ethanol price - corn cost) consistently above $0.50/gallon. Bearish: Average corn prices exceed $5.00/bushel, resulting in crush spreads consistently below $0.30/gallon, indicating significant pressure on profitability. | USDA World Agricultural Supply and Demand Estimates (WASDE) reports (monthly), CME Group (CBOT) for corn futures, industry publications (e.g., Ethanol Producer Magazine) for crush spread analysis. | Farm Bureau reports on crop conditions, NOAA weather forecasts for key corn-growing regions. | Refinitiv Eikon/Bloomberg Terminal: Real-time commodity futures data, S&P Global Platts: Ethanol and corn price benchmarks, crush spread calculations. |
| Continued Recognition of 45Z Production Tax Credits and Final Regulatory Clarity | REX is already recognizing 45Z credits, which significantly boosts profitability. Final, favorable regulations will provide certainty, potentially allow retroactive credits, and confirm the long-term revenue stream from low-carbon fuel production. | Amount of 45Z production tax credit income recognized in subsequent quarters. Release of final Treasury/IRS regulations for 45Z, particularly regarding the 45ZCF-GREET model for CI scoring. | Bullish: Continued recognition of significant 45Z credits (e.g., exceeding $7.5 million per quarter) AND final regulations are favorable (e.g., clear CI scoring methodology that benefits REX, allows retroactive credit generation). Bearish: Significant reduction in recognized 45Z credits OR final regulations introduce unfavorable complexities, stricter requirements, or a CI scoring methodology that negatively impacts REX. | Company earnings reports (10-Q), earnings call transcripts, IRS/Treasury Department official publications for final 45Z guidance. | Industry association updates (e.g., Renewable Fuels Association) on 45Z implementation, government websites tracking tax credit programs. | Tax policy analysis firms (e.g., Bloomberg Tax, Tax Notes) for detailed regulatory interpretations and updates. |
| Sustained Strong U.S. Ethanol Export Volumes | Robust export demand provides a crucial market outlet for REX's ethanol production, supporting favorable pricing and contributing significantly to the company's overall revenue and profitability, especially with increasing production capacity. | Monthly and quarterly U.S. ethanol export data from the Renewable Fuels Association (RFA) and USDA, looking for sustained year-over-year growth. Specifically, continued growth beyond the 20% increase reported to March 2026. | Bullish: U.S. ethanol exports continue to show strong year-over-year growth (e.g., exceeding 15% increase in quarterly export volumes) and meet or exceed USDA's FY 2026 forecast of $5.1 billion. Bearish: Export volumes decline year-over-year or growth significantly decelerates (e.g., below 5% year-over-year growth), indicating weakening international demand. | Renewable Fuels Association (RFA) website, USDA Foreign Agricultural Service (FAS) reports, company earnings call discussions on export markets. | EIA Weekly Ethanol and Biodiesel Plant Production Report, USDA WASDE reports (for global supply/demand context). | S&P Global Platts: Global ethanol trade flows and pricing, Argus Media: Ethanol export market analysis. |
Key Reported Metrics
| Metric | Why It Matters | Last Period |
|---|---|---|
| Gross Profit | Gross Profit is crucial as it reflects the profitability of REX's core ethanol production, directly impacted by volatile input costs (corn) versus selling prices, signaling operational efficiency. | 103.5% |
| 45Z Production Tax Credit Income | This is a new and significant revenue stream, directly impacting profitability and reflecting REX's leadership in low-carbon fuels. Investors are watching for the continued recognition and potential growth of these credits. | N/A |
| Ethanol Sales Volumes | This metric directly measures the company's core business performance, production capabilities, and market demand for its primary product, indicating operational strength and market share. | 0.28% |
Key QuestionsWill the final Treasury Department regulations for 45Z tax credits provide clear and favorable guidelines, enabling REX to continue recognizing significant cred
Will the final Treasury Department regulations for 45Z tax credits provide clear and favorable guidelines, enabling REX to continue recognizing significant credits and confirm its carbon intensity score, thereby validating the expected revenue stream?
- Question 2
Will the EPA finalize REX's Class VI injection well permit application in the near term, and will the Illinois carbon pipeline moratorium expire as scheduled on July 1, 2026, allowing REX to proceed with its pipeline application and advance its carbon capture project without further delays?
- Question 3
Can REX American Resources sustain strong ethanol export volumes and favorable crush spreads in the next quarter, supported by the ongoing One Earth Energy facility expansion and stable domestic demand, to drive continued profitability and validate the long-term growth thesis?
Rerating Thresholds
| Metric | What'S Needed For Rerating | Why It Matters | Earnings Date |
|---|---|---|---|
| Ethanol Sales Volumes | Ethanol Sales Volumes need to accelerate significantly from the current 3.8% year-over-year growth, reaching at least 10% year-over-year growth in the upcoming earnings report. Additionally, management guidance for 2026 should indicate a clear path towards achieving over 20% year-over-year production volume growth from the expanded One Earth Energy facility, which is on track for completion in 2026. | Hitting this threshold is crucial as strong ethanol sales volumes directly validate REX's core business strength and the success of its One Earth Energy expansion. It signals robust demand, enhances operational efficiency, and drives top-line revenue growth, which is key for a positive rerating, especially when combined with anticipated 45Z tax credits and a strong balance sheet. | 2026-03-25 |
| Total Revenue | Total Revenue growth of at least 15% year-over-year for fiscal year 2026 (ending January 2027), coupled with a strong beat on Q4 2025 (ending January 2026) revenue estimates. | This level of growth would confirm the successful ramp-up of the One Earth Energy expansion and the materialization of 45Z tax credits, validating the long-term bull thesis. It would signal REX's enhanced competitive position in the low-carbon fuel market and justify a higher valuation multiple. | 2026-03-25 |
| Gross Profit | Gross Profit of at least $45 million in Q4 2025, representing a significant year-over-year increase and clearly demonstrating the initial impact of 45Z tax credits. | Hitting this threshold would signal a strong reversal of recent gross profit declines, validating the investment thesis around the One Earth Energy expansion, 45Z tax credits, and improved market dynamics. It would demonstrate REX's ability to leverage its strategic investments into tangible profitability, enhancing its competitive position and justifying a higher valuation. | 2026-03-25 |
Earnings Transcript Summary
· 2026Q1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **Advancing Growth Projects**: Management is focused on the ongoing ethanol facility expansion at Gibson City, which is on schedule for completion by the end of 2026, and the carbon capture and sequestration initiative, including working with the EPA on the Class 6 injection well permit application and monitoring the Illinois moratorium expiration. 2. **Maximizing Profitability and Shareholder Value**: The company achieved its most profitable first quarter on a net income per share basis in its history and its 23rd consecutive profitable quarter, emphasizing a consistent approach to deliver outstanding results and pursue value-creating opportunities. 3. **Capitalizing on Policy and Market Tailwinds**: Management is keen to take advantage of market tailwinds driven by domestic policy (like 45Z production tax credits, with $7.5 million recognized in Q1 2026) and strong international export markets for ethanol. | The overall takeaway of the call was highly positive and confident. Management highlighted a record-breaking first quarter for net income per share, marking the company's 23rd consecutive profitable quarter. The tone was optimistic, emphasizing strong operational excellence, disciplined capital allocation, and the successful advancement of key growth initiatives, including the ethanol capacity expansion and the carbon capture project. Management expressed confidence in future growth, driven by favorable market conditions and the benefits of 45Z tax credits. | In Q4 2025, ethanol sales volumes decreased by approximately 6.03% year-over-year (70.1 million gallons in Q4 2025 vs. 74.6 million gallons in Q4 2024). The average selling price for ethanol increased by approximately 4.88% year-over-year ($1.72 per gallon in Q4 2025 vs. $1.64 in Q4 2024). Dry distillers grain sales volumes decreased by approximately 9% year-over-year to 151,000 tons in Q4 2025. The average selling price for dry distillers grain in Q4 2025 was $147.25 per ton, with the Q4 2024 price not explicitly provided in the search results. Modified distillers grain sales volumes increased by approximately 1% year-over-year to 19,700 tons in Q4 2025. The average selling price for modified distillers grain decreased by approximately 6.75% year-over-year ($67.92 per ton in Q4 2025 vs. $72.84 in Q4 2024). Corn oil sales volumes increased by approximately 7% year-over-year to 25.2 million pounds in Q4 2025. The average selling price for corn oil increased by approximately 22.73% year-over-year ($0.54 per pound in Q4 2025 vs. $0.44 in Q4 2024). The company recognized approximately $28.1 million in 45Z tax credits in Q4 2025. | There were no questions from analysts during the call. | Ethanol sales volumes increased by approximately 0.28% year-over-year (71.1 million gallons in Q1 2026 vs. 70.9 million gallons in Q1 2025). The average selling price for ethanol decreased by approximately 5.68% year-over-year ($1.66 per gallon in Q1 2026 vs. $1.76 in Q1 2025). Dry distillers grain sales volumes were approximately 155 thousand tons for Q1 2026, with the prior year's volume not provided in the transcript. The average selling price for dry distillers grain increased by approximately 7.01% year-over-year ($155.86 per ton in Q1 2026 vs. $145.65 in Q1 2025). Modified distillers grain volumes totaled approximately 13.4 thousand tons for Q1 2026, with the prior year's volume not provided. The average selling price for modified distillers grain was approximately $76.94 per ton for Q1 2026, with the prior year's price not provided. Corn oil sales volumes were approximately 23.9 million pounds during Q1 2026, with the prior year's volume not provided. The average selling price for corn oil increased by approximately 17.39% year-over-year ($0.54 per pound in Q1 2026 vs. $0.46 in Q1 2025). The company reported $7.5 million in 45Z production tax credit income in Q1 2026, which began being recognized in Q4 2025. |
· 2025Q3 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **One Earth Energy facility expansion and operational efficiency**: Management is focused on the ongoing expansion of the One Earth Energy facility to 200 million gallons per year, which is on track for completion in 2026. They believe this will significantly enhance production capabilities and operational efficiency, contributing meaningfully to future performance. 2. **Capitalizing on 45Z tax credits and assessing carbon intensity score**: REX is actively engaged in assessing its operations to assign a carbon intensity score, expecting it to be below the threshold to earn 45Z tax credits. They are positioning the company to capitalize on these opportunities, awaiting final guidance from the Treasury Department. 3. **Advancing carbon capture and sequestration initiative**: The company is progressing with its carbon capture and sequestration initiative, with the EPA currently estimating the Class VI injection well permit application to be finalized in June 2026. They have invested significantly in this project and remain within budget. | The overall takeaway of the call was positive and confident, highlighting REX American Resources' strong Q3 2025 performance driven by supportive ethanol industry dynamics, particularly robust export volumes and strong crush spreads. Management expressed confidence in their strategic initiatives, including the One Earth Energy expansion and the carbon capture project, both progressing on schedule and within budget. While cautious about providing specific figures for the 45Z tax credits due to pending regulatory guidance, they are diligently working to capitalize on these opportunities. The company emphasized its strong financial position with no bank debt and anticipates a higher net profit in Q4 2025 compared to the prior year. The tone was optimistic about future growth and improved performance, supported by favorable market conditions and operational excellence. | In Q2 2025, ethanol sales volumes increased by approximately 8.45% year-over-year, which is a deceleration compared to Q3 2025. The average selling price for ethanol decreased by approximately 2.23% year-over-year in Q2 2025, indicating a further decline in Q3 2025. Dry distillers grain sales volumes increased by approximately 11.28% year-over-year in Q2 2025, which decelerated significantly to a decrease in Q3 2025. The average selling price for dry distillers grain decreased by approximately 12.66% year-over-year in Q2 2025, showing a less severe decrease in Q3 2025. Corn oil sales volumes were up approximately 14% year-over-year in Q2 2025, accelerating to 17% in Q3 2025. The average selling price for corn oil increased by approximately 26% year-over-year in Q2 2025, accelerating to 36% in Q3 2025. Corn oil sales revenue increased by approximately 46% year-over-year in Q2 2025, accelerating to 60% in Q3 2025. No year-over-year growth for modified distiller grain volumes or average selling price was found for Q2 2025. | 1. **Key hurdles and timing for the 45Z tax credit program**: Analysts inquired about the challenges and timeline for the 45Z tax credit program. Management responded that they are waiting for Treasury guidelines, prevailing wage requirements, and clear calculations of the carbon intensity (CI) score. They are working with experts but are not yet able to provide specific numbers, hoping to achieve credits this year retroactively if regulations allow. 2. **Impact of tariffs and crack spreads on the industry fundamentals for 2026**: Analysts asked for management's view on the impact of tariffs and crack spreads. Management noted initial concerns about Mexico and Canada exports but observed increased ethanol purchases from Europe and other countries due to tariff pressures, leading to a positive impact on ethanol exports. They also mentioned some weakness in corn oil and DDG exports due to soybean/soybean oil tariffs on China. They expect increased ethanol exports and favorable corn production in Illinois and South Dakota to positively impact cost of production. 3. **Permitting process for the carbon sequestration pipeline and potential hurdles with the Illinois state government**: Analysts questioned the permitting process for the carbon sequestration pipeline. Management explained that while there was a moratorium, the Illinois Commerce Commission (ICC) is working on requirements, and they expect to apply after July 1st. They also clarified that easements for their six-mile pipeline are complete, and it was built to avoid the Mahomet Aquifer. | Ethanol sales volumes increased by approximately 3.84% year-over-year. The average selling price for ethanol decreased by approximately 5.46% year-over-year. Dry distillers grain sales volumes decreased by approximately 5.88% year-over-year, and the average selling price for dry distillers grain decreased by approximately 4.90% year-over-year. Corn oil sales volumes were up approximately 17% year-over-year, with the average selling price increasing by approximately 36% year-over-year, leading to an approximately 60% increase in corn oil sales revenue year-over-year. Modified distiller grain volumes and average selling price were reported, but no year-over-year comparison was provided in the transcript. |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| REX's ethanol production capacity expansion at its 1 Earth Energy facility continues to advance, representing an important step in settling production capabilities and positioning the company for long-term growth. The company is also keen to take advantage of market tailwinds driven by both domestic policy and international export markets. Additionally, REX plans to continue evaluating the best use of its cash, including investments that complement its existing platform. | Stuart A. Rose stated, "I feel the best employees in the business led by our CEO, Zafar A. Rizvi, Again, I think they are better than anyone else in the industry. And our earnings prove it." | The Illinois moratorium on carbon pipeline permitting is scheduled to expire on July 1, 2026. REX is closely monitoring ongoing federal policy discussions related to carbon capture incentives under Section 45Z. Market fundamentals for the ethanol industry remain stable, with domestic demand consistent and export markets strong; according to the Renewable Fuel Association, 2026 ethanol exports to March increased by 20% compared to the same period last year. | The ethanol facility expansion at Gibson City is progressing on schedule and remains on track for completion by the end of 2026. REX continues to work closely with the EPA on its Class VI injection well permit application, with the permitting process ongoing. The company plans to submit its application to the Illinois Commerce Commission shortly after the carbon pipeline moratorium expires. REX remains focused on optimizing its investments to drive future operational excellence and enhanced financial performance and is optimistic for future growth in both ethanol and the receipt of 45Z and Section 45 tax credits. | Food | Decarbonization and Green Energy initiatives are emerging themes, highlighted by the carbon capture and sequestration initiative and the recognition of 45Z production tax credits. | The first quarter of 26 was the most profitable first quarter on a net income per share basis in our company's history. Our team has once again demonstrated the ability to deliver outstanding results. Our ethanol facility expansion at Gibson City continues to progress on schedule. We remain on track for completion by the end of 2026. We began recognizing 45Z production tax credits in the fourth quarter of 2025 and during the first quarter of 2026, we recorded an additional $7.5 million in production tax credit. Gross profit for the first quarter was $29.1 million, compared to $14.3 million in Q1 25. Net income attributable to REX shareholders was $18.5 million or $0.56 per diluted share compared to $8.7 million or $0.26 per diluted share in Q1 25. REX continues to maintain its strong financial position with no bank debt. Domestic demand continues to be stable. While export markets remain strong according to renewable fuel Association, 2026 ethanol export to March increased by 20% compared to the same period last year. We are optimistic for future growth. I feel the best employees in the business... I think they are better than anyone else in the industry. | The permitting process remains ongoing. The Illinois moratorium on carbon pipeline permitting is scheduled to expire on 07/01/2026. Subject to potential adjustments related to inflation and other market factors as the project advance. Selling, general and administrative expenses were approximately $9.7 million for the quarter compared to $5.9 million in Q1 25. Interest and other income totaled $3.2 million for the quarter compared to $4.2 million in Q1 25. Despite permitting delays and certain regulatory headwinds. While policy outcomes remain outside our control. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| The One Earth Energy facility expansion to 200 million gallons per year is on track for completion in 2026, which will significantly enhance production capabilities. REX also plans to use its carbon capture wells for third-party carbon sequestration, with enough capacity on well number one alone, and potential for wells two and three. Several parties have reached out regarding this capacity, though REX is not negotiating contracts until Class VI permits are received and the pipeline is in place. | REX's 'attention to detail and market awareness continues to set REX apart from our competitors.' | The ethanol industry is benefiting from supportive dynamics, particularly strong export volumes and crush spreads. U.S. ethanol exports are expected to set a new record in 2025, with January to August volumes up 14% compared to the first eight months of 2024, partly due to Europe and other countries buying ethanol under tariff pressures. The USDA projects high corn production in South Dakota and Illinois for the 2025/2026 harvest, which is expected to drive lower input prices for REX. However, there are concerns about corn oil prices dropping and DDG export due to factors like soybeans/soybean oils not being shipped abroad or China not buying. The industry is awaiting final guidance from the Treasury Department on 45Z tax credits, including details on prevailing wages and carbon intensity score calculations. The permitting process for carbon capture pipelines in Illinois is also uncertain, with the ICC working on requirements following a moratorium through July 1, but no clear timeline for application acceptance. | The One Earth Energy facility expansion to 200 million gallons per year is on track for completion in 2026, expected to enhance production and operational efficiency. REX is actively positioning to capitalize on 45Z tax credits, expecting to be below the carbon intensity threshold to earn credits, though awaiting final Treasury guidance. The Class VI injection well permit application for carbon capture is estimated to be finalized by EPA in June 2026. The company anticipates increased benefits from 45Z as ethanol production expands and carbon sequestration facilities come online. REX expects the fourth quarter to generate a higher net profit than the previous year's fourth quarter and is positioned for another year of growth and improved performance in 2026, supported by a strong balance sheet and expanding business opportunities. REX believes it can qualify for 45Z credits without land use considerations. | REX's | Decarbonization and Green Energy initiatives are emerging themes, highlighted by the 45Z tax credits for low-carbon fuels and the company's significant investment in carbon capture and sequestration (CCS). The potential for third-party carbon sequestration services, as evidenced by inquiries to REX and ADM's agreement with Google, suggests a broader trend of corporate partnerships and market development in the CCS space. | Our strong results during the quarter benefited from supportive ethanol industry dynamics, especially export volumes and strong crush spreads. Our One Earth Energy facility expansion... is on track for completion in 2026. We expect to be below the threshold to begin earning credits [from 45Z]. We have now delivered 21 consecutive quarters of profitability. We continue to expect 2025 to set a new record for U.S. ethanol exports. We expect the fourth quarter to generate a higher net profit than last year's profitable fourth quarter. As we move into 2026, our strong balance sheet, no debt, and expanding business opportunities position us well for another year of growth and improved performance. | Gross profit for the third quarter was $36.1 million compared to $39.7 million in Q3 2024. This primarily reflects lower prices for ethanol and distiller grains. There is some impact on the corn oil prices, which has dropped a little bit, and also there's some concern about the DDG export. Treasury has not issued the guidelines so far. We're certainly waiting for the guidelines [for 45Z credits]. At this time, we really have no clear guideline on when they will start taking the application [for pipeline permits]. |
Notes
| Date | Comment | Comment Type | Comment Sentiment | Link | IS CHANGE | Price Reaction |
|---|---|---|---|---|---|---|
| 2025-12-04 | REX reported strong Q3 2025 results, driven by robust ethanol exports and crush spreads. The One Earth Energy expansion and 45Z tax credit preparations are on track, with the Class VI well permit expected by June 2026. The company anticipates higher Q4 profits and continued growth in 2026. The stock's modest outperformance post-earnings suggests the market perceived the updates positively. | Earnings Transcript | Neutral | False | +0.54% (vs SPY: +0.58%) |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| REX_4c25ecc7 | completion in 2026 | 2026-01-01 | 2026-12-31 | Completion and commencement of operations for the One Earth Energy facility expansion, increasing ethanol production capacity to 200 million gallons per year. | This expansion is expected to significantly boost REX's production capabilities and operational efficiency, directly impacting future revenue, profitability, and market share. | Ticker | 2025-12-04 | earnings_transcript |
| REX_5b73ae3c | await final guidance from the Treasury Department | 2026-01-01 | 2026-03-31 | Issuance of final guidelines by the Treasury Department for the 45Z clean fuel production tax credit program. | The final guidelines will clarify eligibility criteria, calculation methods, and the overall economic benefit of 45Z credits, directly impacting REX's potential earnings and investment returns from its ethanol and carbon capture projects. | Theme | 2025-12-04 | earnings_transcript |
| REX_4e71badc | June 2026 | 2026-06-01 | 2026-06-30 | Finalization of the EPA Class VI injection well permit application for REX's carbon capture and sequestration initiative at its One Earth Energy facility. | Securing this permit is a critical regulatory milestone enabling REX to proceed with its carbon capture operations, which are essential for qualifying for certain tax credits and positioning the company for long-term growth and reduced carbon intensity. | Ticker | 2025-12-04 | earnings_transcript |
| REX_102f1d05 | July 1 is the last day (for moratorium), after that, if not earlier (for applying) | 2026-07-01 | 2026-12-31 | Illinois Commerce Commission (ICC) establishing clear guidelines and opening the application process for carbon capture pipelines after the moratorium ends. | This regulatory development is crucial for REX to potentially expand its carbon capture infrastructure beyond its initial six-mile pipeline, which could facilitate future carbon sequestration projects and third-party partnerships. | Ticker | 2025-12-04 | earnings_transcript |
| REX_36e1ba89 | in the future | 2026-07-01 | 2028-12-31 | REX entering into agreements with third parties to utilize its excess carbon capture and sequestration capacity. | These partnerships could unlock new revenue streams and enhance the return on investment for REX's carbon capture infrastructure, contributing to long-term profitability and strategic positioning. | Ticker | 2025-12-04 | earnings_transcript |
| REX_62822cbe | by the end of 2026 | 2026-10-01 | 2026-12-31 | Completion of the ethanol production capacity expansion at REX's One Earth Energy facility in Gibson City. | This expansion will significantly increase REX's ethanol production capabilities, driving higher sales volumes and positioning the company for long-term growth and enhanced financial performance. Bullish if completed on schedule, bearish if delayed. | Ticker | 2026-05-28 | earnings_transcript |
| REX_2b87f7e2 | permitting process remains ongoing | 2026-06-01 | 2026-06-30 | Finalization of the EPA Class VI injection well permit application for REX's carbon capture and sequestration initiative. | This permit is crucial for advancing the carbon capture project, enabling carbon sequestration operations and the potential to fully realize 45Z clean fuel tax credits and third-party sequestration opportunities. Bullish if approved by June 2026, bearish if significantly delayed. | Ticker | 2026-05-28 | earnings_transcript |
| REX_3853523c | scheduled to expire on 07/01/2026 | 2026-07-01 | 2026-07-31 | Expiration of the Illinois moratorium on carbon pipeline permitting and REX's subsequent submission of its pipeline application to the Illinois Commerce Commission. | This regulatory milestone is essential for developing the necessary infrastructure for REX's carbon capture project, allowing for the transportation of captured CO2 for sequestration. Bullish if the moratorium expires and the application proceeds smoothly, bearish if further delays or new regulatory hurdles emerge. | Ticker | 2026-05-28 | earnings_transcript |
| REX_407c124f | ongoing federal policy discussions related to carbon capture incentives under Section 45Z | 2026-06-01 | 2026-09-30 | Release of final Treasury/IRS regulations for Section 45Z clean fuel production tax credits, particularly regarding the carbon intensity (CI) scoring methodology. | Final regulations will provide crucial clarity on the eligibility, calculation, and ultimate value of 45Z credits for REX, significantly impacting its future revenue streams and profitability from low-carbon ethanol production. Bullish if favorable rules are finalized, bearish if they introduce complexities or stricter requirements. | Ticker | 2026-05-28 | earnings_transcript |