UBS Boosts PT on CONSOL (CNX) to $47; Notes Improved Focus on NAV

UBS raises its target price on CONSOL Energy Inc. (NYSE: CNX) from $45 to $47 and maintains a Neutral rating on the stock following the company's recent analyst and investor day.

Analyst Kumi Chen noted a robust E&P overview and mention of ample funding options as key takeaways of the event.

On E&P: The E&P presentation provided for the first time detailed type curve and economics by sub-region, enabling us to develop a more robust NAV analysis of its Marcellus/Utica assets. CONSOL highlighted a wider use of reduced cluster spacing & shorter stage length (RCS/SSL) completions, leading to improved EUR & returns across all operating regions. The company is also targeting a 15% decline in well cost by 2015 due to efficiency gains, which can further improve returns & boost our NAV. While there has been limited drilling activity in the Upper Devonian plays, CONSOL emphasized the vast resource potential from stacked pays, which offer visible long term growth potential.

On funding: High capex rates should lead to modest funding gaps going forward. In our view, CONSOL has sufficient flexibility to fund its growth going forward. The $1B asset sale goal looks to be conservative based on the value of the Illinois basin coal reserves alone.

For an analyst ratings summary and ratings history on CONSOL Energy click here. For more ratings news on CONSOL Energy click here.

CONSOL Energy closed at $44.82 yesterday.

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