Intrinsic value of Consol Energy - CNX

Previous Close

$16.40

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$16.40

 
Intrinsic value

$3.99

 
Up/down potential

-76%

 
Rating

str. sell

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CNX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -4.85
  27.00
  24.80
  22.82
  21.04
  19.43
  17.99
  16.69
  15.52
  14.47
  13.52
  12.67
  11.90
  11.21
  10.59
  10.03
  9.53
  9.08
  8.67
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
Revenue, $m
  1,981
  2,516
  3,140
  3,856
  4,668
  5,575
  6,578
  7,676
  8,867
  10,150
  11,523
  12,983
  14,528
  16,157
  17,869
  19,661
  21,535
  23,490
  25,526
  27,645
  29,849
  32,140
  34,521
  36,995
  39,566
  42,238
  45,017
  47,908
  50,916
  54,048
  57,311
Variable operating expenses, $m
 
  3,542
  4,421
  5,430
  6,572
  7,849
  9,261
  10,807
  12,485
  14,291
  16,224
  18,280
  20,456
  22,749
  25,159
  27,683
  30,321
  33,074
  35,941
  38,925
  42,028
  45,253
  48,605
  52,088
  55,708
  59,471
  63,384
  67,454
  71,690
  76,100
  80,694
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,325
  3,542
  4,421
  5,430
  6,572
  7,849
  9,261
  10,807
  12,485
  14,291
  16,224
  18,280
  20,456
  22,749
  25,159
  27,683
  30,321
  33,074
  35,941
  38,925
  42,028
  45,253
  48,605
  52,088
  55,708
  59,471
  63,384
  67,454
  71,690
  76,100
  80,694
Operating income, $m
  -344
  -1,026
  -1,281
  -1,573
  -1,904
  -2,274
  -2,684
  -3,132
  -3,618
  -4,141
  -4,701
  -5,297
  -5,928
  -6,592
  -7,290
  -8,022
  -8,786
  -9,584
  -10,415
  -11,279
  -12,178
  -13,113
  -14,084
  -15,094
  -16,143
  -17,233
  -18,367
  -19,546
  -20,774
  -22,052
  -23,383
EBITDA, $m
  255
  -267
  -333
  -409
  -495
  -591
  -697
  -813
  -939
  -1,075
  -1,221
  -1,375
  -1,539
  -1,712
  -1,893
  -2,083
  -2,281
  -2,489
  -2,704
  -2,929
  -3,162
  -3,405
  -3,657
  -3,919
  -4,192
  -4,475
  -4,769
  -5,076
  -5,394
  -5,726
  -6,072
Interest expense (income), $m
  187
  166
  244
  334
  438
  556
  688
  834
  993
  1,167
  1,353
  1,553
  1,765
  1,989
  2,226
  2,475
  2,735
  3,008
  3,292
  3,588
  3,896
  4,216
  4,549
  4,895
  5,254
  5,628
  6,016
  6,420
  6,840
  7,277
  7,733
Earnings before tax, $m
  -526
  -1,192
  -1,525
  -1,908
  -2,343
  -2,831
  -3,372
  -3,966
  -4,611
  -5,308
  -6,054
  -6,849
  -7,692
  -8,581
  -9,516
  -10,497
  -11,522
  -12,591
  -13,706
  -14,867
  -16,074
  -17,329
  -18,633
  -19,989
  -21,397
  -22,861
  -24,383
  -25,967
  -27,614
  -29,329
  -31,115
Tax expense, $m
  10
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -848
  -1,192
  -1,525
  -1,908
  -2,343
  -2,831
  -3,372
  -3,966
  -4,611
  -5,308
  -6,054
  -6,849
  -7,692
  -8,581
  -9,516
  -10,497
  -11,522
  -12,591
  -13,706
  -14,867
  -16,074
  -17,329
  -18,633
  -19,989
  -21,397
  -22,861
  -24,383
  -25,967
  -27,614
  -29,329
  -31,115

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  60
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,184
  11,594
  14,469
  17,771
  21,510
  25,690
  30,312
  35,371
  40,862
  46,775
  53,100
  59,828
  66,950
  74,458
  82,344
  90,606
  99,240
  108,248
  117,632
  127,398
  137,554
  148,110
  159,081
  170,482
  182,330
  194,646
  207,453
  220,774
  234,637
  249,071
  264,105
Adjusted assets (=assets-cash), $m
  9,124
  11,594
  14,469
  17,771
  21,510
  25,690
  30,312
  35,371
  40,862
  46,775
  53,100
  59,828
  66,950
  74,458
  82,344
  90,606
  99,240
  108,248
  117,632
  127,398
  137,554
  148,110
  159,081
  170,482
  182,330
  194,646
  207,453
  220,774
  234,637
  249,071
  264,105
Revenue / Adjusted assets
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
Average production assets, $m
  8,437
  10,715
  13,372
  16,424
  19,879
  23,743
  28,014
  32,690
  37,765
  43,229
  49,075
  55,294
  61,876
  68,814
  76,103
  83,738
  91,718
  100,043
  108,716
  117,741
  127,127
  136,884
  147,023
  157,560
  168,510
  179,893
  191,728
  204,040
  216,852
  230,192
  244,087
Working capital, $m
  -314
  -13
  -16
  -19
  -23
  -28
  -33
  -38
  -44
  -51
  -58
  -65
  -73
  -81
  -89
  -98
  -108
  -117
  -128
  -138
  -149
  -161
  -173
  -185
  -198
  -211
  -225
  -240
  -255
  -270
  -287
Total debt, $m
  3,126
  4,511
  6,190
  8,118
  10,302
  12,743
  15,442
  18,397
  21,603
  25,056
  28,750
  32,680
  36,839
  41,223
  45,829
  50,654
  55,696
  60,957
  66,437
  72,140
  78,071
  84,236
  90,643
  97,301
  104,221
  111,413
  118,892
  126,672
  134,768
  143,197
  151,977
Total liabilities, $m
  5,386
  6,771
  8,450
  10,378
  12,562
  15,003
  17,702
  20,657
  23,863
  27,316
  31,010
  34,940
  39,099
  43,483
  48,089
  52,914
  57,956
  63,217
  68,697
  74,400
  80,331
  86,496
  92,903
  99,561
  106,481
  113,673
  121,152
  128,932
  137,028
  145,457
  154,237
Total equity, $m
  3,798
  4,823
  6,019
  7,393
  8,948
  10,687
  12,610
  14,714
  16,999
  19,458
  22,090
  24,889
  27,851
  30,974
  34,255
  37,692
  41,284
  45,031
  48,935
  52,997
  57,222
  61,614
  66,178
  70,920
  75,849
  80,973
  86,300
  91,842
  97,609
  103,613
  109,868
Total liabilities and equity, $m
  9,184
  11,594
  14,469
  17,771
  21,510
  25,690
  30,312
  35,371
  40,862
  46,774
  53,100
  59,829
  66,950
  74,457
  82,344
  90,606
  99,240
  108,248
  117,632
  127,397
  137,553
  148,110
  159,081
  170,481
  182,330
  194,646
  207,452
  220,774
  234,637
  249,070
  264,105
Debt-to-equity ratio
  0.823
  0.940
  1.030
  1.100
  1.150
  1.190
  1.220
  1.250
  1.270
  1.290
  1.300
  1.310
  1.320
  1.330
  1.340
  1.340
  1.350
  1.350
  1.360
  1.360
  1.360
  1.370
  1.370
  1.370
  1.370
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
Adjusted equity ratio
  0.410
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -848
  -1,192
  -1,525
  -1,908
  -2,343
  -2,831
  -3,372
  -3,966
  -4,611
  -5,308
  -6,054
  -6,849
  -7,692
  -8,581
  -9,516
  -10,497
  -11,522
  -12,591
  -13,706
  -14,867
  -16,074
  -17,329
  -18,633
  -19,989
  -21,397
  -22,861
  -24,383
  -25,967
  -27,614
  -29,329
  -31,115
Depreciation, amort., depletion, $m
  599
  760
  948
  1,165
  1,410
  1,684
  1,987
  2,318
  2,678
  3,066
  3,481
  3,922
  4,388
  4,880
  5,397
  5,939
  6,505
  7,095
  7,710
  8,350
  9,016
  9,708
  10,427
  11,174
  11,951
  12,758
  13,598
  14,471
  15,380
  16,326
  17,311
Funds from operations, $m
  378
  -432
  -576
  -743
  -933
  -1,147
  -1,385
  -1,647
  -1,933
  -2,242
  -2,574
  -2,928
  -3,304
  -3,701
  -4,119
  -4,558
  -5,017
  -5,496
  -5,996
  -6,516
  -7,058
  -7,621
  -8,206
  -8,814
  -9,446
  -10,103
  -10,786
  -11,496
  -12,235
  -13,004
  -13,804
Change in working capital, $m
  -91
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
Cash from operations, $m
  469
  -726
  -573
  -739
  -929
  -1,142
  -1,380
  -1,642
  -1,927
  -2,235
  -2,567
  -2,921
  -3,296
  -3,693
  -4,111
  -4,549
  -5,007
  -5,486
  -5,986
  -6,506
  -7,047
  -7,609
  -8,194
  -8,802
  -9,433
  -10,089
  -10,772
  -11,481
  -12,219
  -12,988
  -13,788
Maintenance CAPEX, $m
  0
  -598
  -760
  -948
  -1,165
  -1,410
  -1,684
  -1,987
  -2,318
  -2,678
  -3,066
  -3,481
  -3,922
  -4,388
  -4,880
  -5,397
  -5,939
  -6,505
  -7,095
  -7,710
  -8,350
  -9,016
  -9,708
  -10,427
  -11,174
  -11,951
  -12,758
  -13,598
  -14,471
  -15,380
  -16,326
New CAPEX, $m
  -227
  -2,279
  -2,657
  -3,052
  -3,455
  -3,863
  -4,271
  -4,676
  -5,074
  -5,465
  -5,846
  -6,218
  -6,582
  -6,938
  -7,289
  -7,635
  -7,980
  -8,325
  -8,673
  -9,026
  -9,386
  -9,757
  -10,139
  -10,536
  -10,950
  -11,383
  -11,836
  -12,312
  -12,812
  -13,339
  -13,895
Cash from investing activities, $m
  487
  -2,877
  -3,417
  -4,000
  -4,620
  -5,273
  -5,955
  -6,663
  -7,392
  -8,143
  -8,912
  -9,699
  -10,504
  -11,326
  -12,169
  -13,032
  -13,919
  -14,830
  -15,768
  -16,736
  -17,736
  -18,773
  -19,847
  -20,963
  -22,124
  -23,334
  -24,594
  -25,910
  -27,283
  -28,719
  -30,221
Free cash flow, $m
  956
  -3,603
  -3,990
  -4,739
  -5,549
  -6,416
  -7,335
  -8,304
  -9,320
  -10,378
  -11,479
  -12,619
  -13,800
  -15,020
  -16,280
  -17,581
  -18,926
  -20,316
  -21,754
  -23,242
  -24,783
  -26,382
  -28,041
  -29,765
  -31,558
  -33,423
  -35,366
  -37,391
  -39,503
  -41,707
  -44,009
Issuance/(repayment) of debt, $m
  -960
  1,445
  1,679
  1,928
  2,183
  2,441
  2,699
  2,955
  3,206
  3,453
  3,694
  3,929
  4,159
  4,384
  4,606
  4,825
  5,042
  5,260
  5,480
  5,703
  5,931
  6,165
  6,407
  6,658
  6,919
  7,193
  7,479
  7,780
  8,096
  8,429
  8,780
Issuance/(repurchase) of shares, $m
  0
  3,183
  3,507
  4,185
  4,921
  5,713
  6,559
  7,454
  8,397
  9,385
  10,416
  11,489
  12,603
  13,758
  14,955
  16,194
  17,476
  18,803
  20,177
  21,601
  23,077
  24,609
  26,198
  27,850
  29,567
  31,354
  33,214
  35,153
  37,174
  39,282
  41,483
Cash from financing (excl. dividends), $m  
  -967
  4,628
  5,186
  6,113
  7,104
  8,154
  9,258
  10,409
  11,603
  12,838
  14,110
  15,418
  16,762
  18,142
  19,561
  21,019
  22,518
  24,063
  25,657
  27,304
  29,008
  30,774
  32,605
  34,508
  36,486
  38,547
  40,693
  42,933
  45,270
  47,711
  50,263
Total cash flow (excl. dividends), $m
  -10
  -2,158
  -2,311
  -2,811
  -3,366
  -3,974
  -4,636
  -5,350
  -6,113
  -6,925
  -7,785
  -8,690
  -9,641
  -10,635
  -11,674
  -12,757
  -13,884
  -15,056
  -16,273
  -17,539
  -18,852
  -20,217
  -21,635
  -23,107
  -24,638
  -26,230
  -27,887
  -29,611
  -31,407
  -33,278
  -35,228
Retained Cash Flow (-), $m
  904
  -1,025
  -1,196
  -1,374
  -1,555
  -1,739
  -1,923
  -2,105
  -2,284
  -2,460
  -2,631
  -2,799
  -2,963
  -3,123
  -3,281
  -3,437
  -3,592
  -3,747
  -3,904
  -4,063
  -4,225
  -4,392
  -4,564
  -4,743
  -4,929
  -5,124
  -5,328
  -5,542
  -5,767
  -6,004
  -6,254
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  7.70
  8.09
  8.49
  8.91
  9.36
  9.83
  10.32
  10.83
  11.38
  11.95
  12.54
  13.17
  13.83
  14.52
  15.25
  16.01
  16.81
  17.65
  18.53
  19.46
  20.43
  21.45
  22.52
  23.65
  24.83
  26.07
  27.38
  28.75
  30.18
  31.69
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  55.1
  32.2
  19.2
  11.7
  7.2
  4.5
  2.9
  1.8
  1.2
  0.8
  0.5
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

CONSOL Energy Inc., together with its subsidiaries, operates as an integrated energy company in the United States and internationally. The company primarily operates through two divisions, Exploration and Production (E&P), and Pennsylvania (PA) Mining Operations. The E&P division produces pipeline quality natural gas primarily to gas wholesalers. This division owns rights to extract natural gas in Pennsylvania, West Virginia, and Ohio from approximately 413,000 net Marcellus Shale acres; and 683,000 net acres of Utica Shale, as well as owns rights to extract coalbed methane (CBM) in Virginia from approximately 268,000 net CBM acres, which cover a portion of its coal reserves in Central Appalachia. It also owns rights to extract natural gas from shallow oil and gas positions in Illinois, Indiana, Kentucky, Pennsylvania, West Virginia, Virginia, and New York from approximately 766,000 net acres; 95,000 net acres of Chattanooga Shale; and 503,000 net acres of Huron Shale potential in Kentucky, West Virginia, and Virginia, as well as provides midstream gas services. The PA Mining Operations division engages in mining, preparation, and marketing of thermal coal primarily to power generators; and metallurgical coal. The company also provides energy services, including coal terminal services, water services, and land resource management services. CONSOL Energy Inc. was founded in 1864 and is headquartered in Canonsburg, Pennsylvania.

FINANCIAL RATIOS  of  Consol Energy (CNX)

Valuation Ratios
P/E Ratio -4.4
Price to Sales 1.9
Price to Book 1
Price to Tangible Book
Price to Cash Flow 8
Price to Free Cash Flow 15.5
Growth Rates
Sales Growth Rate -4.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -76.9%
Cap. Spend. - 3 Yr. Gr. Rate -31.4%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 72.7%
Total Debt to Equity 82.3%
Interest Coverage -2
Management Effectiveness
Return On Assets -6.5%
Ret/ On Assets - 3 Yr. Avg. -1.7%
Return On Total Capital -11%
Ret/ On T. Cap. - 3 Yr. Avg. -4.5%
Return On Equity -20%
Return On Equity - 3 Yr. Avg. -8.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 33.1%
Gross Margin - 3 Yr. Avg. 42.3%
EBITDA Margin 13.1%
EBITDA Margin - 3 Yr. Avg. 19.9%
Operating Margin -17.4%
Oper. Margin - 3 Yr. Avg. -17.4%
Pre-Tax Margin -26.6%
Pre-Tax Margin - 3 Yr. Avg. -14.4%
Net Profit Margin -42.8%
Net Profit Margin - 3 Yr. Avg. -18.4%
Effective Tax Rate -1.9%
Eff/ Tax Rate - 3 Yr. Avg. 11%
Payout Ratio -0.2%

CNX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CNX stock intrinsic value calculation we used $1981 million for the last fiscal year's total revenue generated by Consol Energy. The default revenue input number comes from 2016 income statement of Consol Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CNX stock valuation model: a) initial revenue growth rate of 27% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.7%, whose default value for CNX is calculated based on our internal credit rating of Consol Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Consol Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CNX stock the variable cost ratio is equal to 140.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CNX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Consol Energy.

Corporate tax rate of 27% is the nominal tax rate for Consol Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CNX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CNX are equal to 425.9%.

Life of production assets of 14.1 years is the average useful life of capital assets used in Consol Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CNX is equal to -0.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3798 million for Consol Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 237.783 million for Consol Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Consol Energy at the current share price and the inputted number of shares is $3.9 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
CLD Cloud Peak Ene 3.58 prem.  prem.
AHGP Alliance Holdi 28.72 prem.  prem.

COMPANY NEWS

▶ Behind the Rise in Norfolk Southerns Carloads in Week 19   [May-23-17 06:06PM  Market Realist]
▶ ETFs with exposure to CONSOL Energy, Inc. : May 19, 2017   [May-19-17 01:45PM  Capital Cube]
▶ United Mine Workers president charged with trespassing after Consol HQ rally   [May-17-17 02:49PM  American City Business Journals]
▶ Decoding Carloads of Union Pacific in Week 18   [May-15-17 10:38AM  Market Realist]
▶ Why CSXs Carloads Fell in Week 17 of 2017   [May-09-17 09:07AM  Market Realist]
▶ Why Coal Matters for Norfolk Southern   [May-08-17 05:05PM  Market Realist]
▶ Consol reports 1Q loss   [06:59AM  Associated Press]
▶ Did Norfolk Southerns Coal Carloads Push Volumes in Week 16?   [Apr-28-17 05:06PM  Market Realist]
▶ Union Pacific: Behind the Freight Volume Rise in Week 15   [Apr-21-17 02:35PM  Market Realist]
▶ Union Pacific: Unloading Freight Volumes in Week 14 of 2017   [Apr-18-17 05:35PM  Market Realist]
▶ How CSXs Carloads Fared against Norfolk Southern in Week 12   [Apr-03-17 09:07AM  Market Realist]
▶ Unloading Norfolk Southerns Carloads in Week 12   [Mar-31-17 05:35PM  Market Realist]
▶ Uncertainty Burns Hot For US Coal   [Mar-01-17 09:55AM  at Forbes]
Stock chart of CNX Financial statements of CNX Annual reports of CNX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.