REX AMERICAN RESOURCES Corp (REX) stock intrinsic value fair value estimate & owner earnings analysis

REX American Resources owns 76% of the One Earth ethanol plant in Illinois and 99.7% of NuGen in South Dakota, plus minority stakes in four Big River plants, and carries no bank debt. It makes a commodity: its earnings depend on the spread between ethanol and co-product prices and the cost of corn and natural gas. About $379.5 million of cash and short-term investments sat on the balance sheet at July 31, 2026, against $3.1 million of finance leases. What the business has earned. We measure what the owners could take out each year: operating cash flow, with swings in receivables, inventory and payables removed, less stock compensation and less only the capital spending needed to keep the plants running. The big One Earth expansion and carbon-sequestration spending is disclosed separately and is treated as growth, not upkeep (maintenance spending has run roughly $4-25 million a year against about $15 million of depreciation). Per share, for years ended January: 2017 $1.22, 2018 $0.69, 2019 $0.77, 2020 $0.68, 2021 $0.53, 2022 $2.42, 2023 $1.47, 2024 $2.68, 2025 $2.46, 2026 $2.60. The last figure includes about $0.74 a share from section 45Z clean-fuel tax credits; without them it is about $1.86. The series is restated from our earlier work, so the figures in our September 2 analysis are not comparable with these. The outside partners' share of the plants' profit (about 15-16% of owner earnings, roughly $12 million last year) is treated as a claim on the business and is not ours. Normal earning power. We take the median of all ten years, because the industry has swung between the thin margins of the years ended January 2018 through 2021 and the boom since and any shorter window would catch only one side. Interest on the cash pile is stripped out, since the cash is valued separately, and so are the 45Z credits, since they are legislated to end. That leaves about $44 million a year of owner earnings before the partners' share, or about $37.5 million (about $1.13 a share) to REX shareholders. The most recent fiscal year grew about 6% on our measure, but we start from the through-cycle level, not from last year's, so year one carries no growth; the stronger first half of this fiscal year (net income of $62 million versus $20 million a year earlier, with a record second quarter) does not move that level. Base case, about $24.65 a share. The plants earn $37.5 million a year, rising about 5% once the permitted 150-to-175-million-gallon One Earth expansion (EPA construction permit received, $107.6 million spent through January and operation expected during this fiscal year, which the company reports is on track) is running, and continue for 25 years, after which we credit nothing. The 45Z credit, extended through December 31, 2029 by the 2025 federal budget law and worth $28.1 million to REX last year, is credited at $25 million a year for four years. We leave out share gains, any further expansion to 200 million gallons (no permit yet), buybacks, and any sequestration credit, because the final injection permit is not yet issued (draft permits arrived in August 2026). Business worth about $15.16 a share, credits $2.62, and net cash $6.87 a share after setting aside roughly $75 million that effectively belongs to the minority partners (our estimate; the filings do not break it out), $40 million to run the plants, and about $34 million still to be spent on the projects. Debt is nil, so there is nothing to subtract beyond the leases. Bear case, about $16.37 a share. Ethanol repeats the years ended January 2018 through 2021, when owner earnings ran about half the ten-year median for four years: here five years at half the normal level, a recovery to 90% for ten years, a second five-year slump, and nothing after year 20. The expansion adds nothing, the final sequestration permit is denied or the credit rules are finalized unfavorably, and the 45Z credit is $12 million a year (the 10-K warns that Treasury guidance is not final and that carbon-intensity scoring changes could be material). Business about $9.00 a share, credits $1.26, net cash $6.12 (more set aside for partners and operating needs), no debt, so the whole difference is cash and operating value. Even here the company has no maturities or covenants to breach. Bull case, about $33.63 a share. Margins run 35% above the ten-year median for 15 years (the years ended January 2022 through 2025 averaged about 60% above), the expansion operates on schedule, the 45Z credit holds at $30 million for four years, and the sequestration project is permitted and earns section 45Q credits, which we put at a net $20 million a year for nine years afterward. Business about $20.36 a share, credits $6.40, net cash $6.87, no debt. What is different from September. The August 2026 draft EPA permits and the strong half-year are real news, but they raise confidence in the credits, not the normal level. Remaining project spending is about $34 million, not the roughly $120 million we deducted before, since the budget is $220-230 million and about $191-201 million has been spent. Our bull case is more restrained than before because it no longer credits earnings growth beyond the permitted expansion and the sequestration credits. What could make this wrong. Federal ethanol or blending policy, loss or shrinking of the 45Z credit, a long margin slump, and the minority partners' true share of the cash are the main uncertainties. Most of the cash sits in short-term investments, so the cash figure is comparatively solid; the earnings power is not. Margin-of-safety price: $12.50. We are moderately sure of the earnings level (the ten-year range was $0.53 to $2.68 a share) and highly sure of the cash and the absence of debt. The worst plausible outcomes are a repeat of the years ended January 2019 through 2021 combined with a failed sequestration permit and early loss of the credits; that scenario still leaves the debt-free balance sheet intact and a value near $11-13 a share, and the plants are physical assets with a record of earning through downturns. If we are wrong that the normal level holds (it runs half as high for good), the shares are worth about $13; if credits vanish early, about $2.60 less than the base; if the partners claim $40 million more of the cash, about $1.20 less. The business pays its owners mainly by building cash and repurchasing shares under its buyback program, retaining roughly $1.1-1.9 a share of owner earnings a year, and the price assumes a holding period of three to four years. At $12.50 the cash and short-term investments, net of the partners' claim and project spending, account for over half the price, and the plants are priced at about five times a normal year's profit. If value lands at the bear figure, three years of retained earnings lift it to about $19.50, which implies about 16% a year; if it lands midway between the bear and base figures, about $24.40, or about 25% a year. Because the outcomes are commodity-driven and skewed toward the lower end, that cushion is required, and $12.50 is where we judge a 20% annual return is reasonably supported.