| How CONSOL Energy’s Relative Valuation Compares to Peers | |
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Must-Know Reasons behind CONSOL Energy's Scary Downtrend (Continued from Prior Part) CONSOL Energy’s relative valuation
The below table shows different fundamental ratios for the S&P 500 (SPY) upstream companies that have a similar production mix and have overlapping geographical areas of operations.
CONSOL Energy (CNX) has a higher forward EV-to-EBITDA ratio of ~7x when compared with Southwestern Energy (SWN), another natural gas producer in the Marcellus Shale, which has a forward EV-to-EBITDA ratio of ~6x. But when compared with other oil and natural gas producers like Noble Energy (NBL) and Cimarex Energy (XEC), which have forward EV-to-EBITDA ratios of ~8 and ~11, respectively, CNX’s valuation appears to be cheaper. Pioneer Natural Resources (PXD) has a forward EV-to-EBITDA ratio of 10x, which is again higher when compared with CNX’s. Overall, CNX’s valuation appears to be at the lower end when compared with its peers. The average EV-to-EBITDA ratio for the upstream industry is ~12.2x.
Even when compared with price-to-book or price-to-sales metrics, CNX appears much cheaper with numbers of ~0.34x and ~0.55x, respectively.
Why is CNX trading at a discount?
In the above table, it is clear that companies with higher leverage or lower current ratio are trading at a discount to book value, or have lower price to sales. A possible explanation for this could be a fear of an energy-driven debt crisis if commodity prices stay low for longer than anticipated. Also, given a path of rising interest rates at a time when energy companies are so indebted and are scrambling for access to capital, interest expenses for highly leveraged companies can rise further.
As of 3Q15, CNX has a much higher debt-to-equity ratio of ~76% and the lowest current ratio of 0.52. Thus, it is trading at a discount to its peers.
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Consol Energy Inc.
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PRODUCER |
CODE : CNX |
ISIN : US20854P1093 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Consol Energy is a producing company based in United states of america. Consol Energy produces coal in USA, and holds various exploration projects in USA. Its main asset in production is BUCHANAN in USA. Consol Energy is listed in Germany and in United States of America. Its market capitalisation is US$ 6.0 billions as of today (€ 5.4 billions). Its stock quote reached its highest recent level on June 06, 2008 at US$ 99.79, and its lowest recent point on April 26, 2019 at US$ 10.00. Consol Energy has 223 758 284 shares outstanding. |