CONSOL Energy’s 3Q15 earnings call
In 3Q15, CONSOL Energy (CNX) reported a 27% quarter-over-quarter reduction in its capital expenditures. In CNX’s earnings call, the company’s chief financial officer, David Khani, said that CNX will continue its focus on reducing capital expenditure. He also said that CNX’s focus on reducing capex will benefit free cash flow in 2016. Khani said, “we will be free cash flow neutral in the fourth quarter and we will be free cash flow positive in 2016.”
CNX’s focus on debt reduction
Currently, CNX has ~$2 billion of assets available for sale, including some coal assets, under its asset monetization program. In the company’s 3Q15 earnings call, CNX’s president and chief executive officer, Nicholas DeIuliis, said, “We will continue to use the proceeds from our asset monetization program to pay down debt.”
Shift from coal to natural gas
Nicholas DeIuliis said, “from our perspective, we’ve seen, within the United States, a significant and a permanent shift of market share on the generation grid from coal to natural gas.” He further said that CNX is closely watching and creating its plans based on these fundamental changes in the industry.
Wall Street ratings for CNX
Currently, ~48% of Wall Street analysts surveyed rate CNX as a “buy” and ~52% of analysts rate it as a “hold.” No analyst has given it a “sell” rating. The median price target from these recommendations is $13.62, which is ~104% higher than the January 12 closing price of $6.70. Based on the median price targets from Wall Street analysts, the S&P 500 (SPY) upstream companies like Range Resources (RRC), EOG Resources (EOG), and Pioneer Natural Resources (PXD) have potential upsides of ~47%, ~31%, and ~32%, respectively, from their January 12 closing prices.