Davenport Reiterates Buy Rating on CONSOL Energy (CNX), But Lowers Estimates and Price Target
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Davenport reiterates a Buy rating on CONSOL Energy (NYSE: CNX), but lowers estimates and price target from $94 to $75.
Davenport analyst says, "Valuing the company’s ownership interest in CNX Gas at its current market value of $2.86 billion, or $15.40 per CONSOL share, we derive our $75 target price by applying a 4.5x EV/EBITDA multiple to our 2010 EBITDA estimate excluding CNX Gas of $2,313 million. Regarding DCF values, our base case long-term pricing assumptions of $75/ton for CAPP steam coal, $85 for NAPP and a $150/metric ton benchmark price (FOB at the port) of $150 for metallurgical coal, produces a share value of $106, while our “low case” scenario assumptions of $70/ton for CAPP steam coal, $80/ton for NAPP and $125/metric ton met coal benchmark, produces a value of $89 per share, giving support to a higher 2010 target multiple than for other peer companies, in our opinion."
CONSOL Energy Inc. (CONSOL Energy) is a multi-fuel energy producer and energy services provider that primarily serves the electric power generation industry in the United States.
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