The struggling coal industry’s outlook is improving on growing U.S. power demand in part from artificial intelligence data centers, according to Jefferies. Long viewed as part of the “old economy,” coal is now exacting revenge by taking market share from fuels like natural gas that displaced it, Jefferies analysts told clients in a Thursday note. Thermal coal demand has increased 15% over last year, according to the firm. Jefferies upgraded Core Natural Resources to buy and increased its price target by 40% to $125 per share. The new target suggests 28% upside from Thursday’s close. It also bumped its target for Peabody Energy by 24% to $42 per share, offering investors potential upside of more than 30%. U.S. coal demand plummeted from one billion tons per year from 2003 to 2008 to just below 400 million tons in 2023 to 2024 due to the growth of natural gas and environmental concerns, according to Jefferies. But the industry’s worst days appear to be over, according to the firm. “The bottom line is we would buy shares of BTU and CNR now as we are likely to be in the early stages of an earnings upgrade cycle and equity valuation re-rating cycle for thermal coal miners in the US,” analyst Christopher LaFemina told clients.