Pennsylvania-based CONSOL Energy (CNX) is a multi-fuel energy producer as well as energy services provider, primarily catering to the U.S. power producers. Its deep and diversified portfolio, largely comprising of coal and natural gas, provides the company with significant long-term growth potential. Its low-volatile metallurgical coal and high-Btu steam coal command premium prices even in a constrained commodity environment and the low-risk, low-cost gas operations diversify the energy portfolio and provides steady cash flow.
CONSOL Energy is the largest and one of the low-cost coal producers in the northern Appalachia basin. This gives the company a much less-risky operating profile relative to other eastern producers heavily levered to the central Appalachia region, which faces stiffer regulations and operational hazards. CONSOL Energy has a strong balance sheet, with low debt and sufficient liquidity. The company ended the second quarter of 2009 with 100.7 million of cash and $360.8 million of available credit facility.
CONSOL Energy is well-placed to take advantage of the resurgence in coal demand once the global economy starts recovering. However, uncertainty surrounding the depth and span of the current global downturn still remains. Although recent rhetoric may suggest a bottoming or stabilization of markets, definitive signs of revival are yet to be seen. As such, we see the shares of CONSOL Energy performing in line with the broader market and rate it as Neutral.
Read the full analyst report on “CNX”
Zacks Investment Research
