New Hope (ASX:NHC) is poised to benefit from tighter liquefied natural gas (LNG) and oil markets, even as volatile thermal market conditions create uncertainty through 2026, Jefferies said in a note on Tuesday.

The investment firm said that production recovery in the second half of fiscal 2026, primarily due to Bengalla coal mine rebounding, will drive growth. Saleable production in the second half is projected at 4.7 million to 6 million tonnes, compared with 5.5 million tonnes in the first half.

Despite an unfavorable market outlook, the company is positioned to gain as a "leveraged beneficiary" of firm Newcastle pricing, with about three months of production already sold and roughly 5% of sales book hedged.

The brokerage sees thermal pricing to remain higher than pre-US-Iran conflict expectations, owing to the slower pace of LNG normalization, elevated shipping and freight costs, and increased fuel-security behavior.

Jefferies maintained its hold rating on New Hope and raised price target to AU$4.80 from AU$4.40.