Intrinsic value of CNX Resources Corporation - CNX

Previous Close

$7.29

  Intrinsic Value

$4.32

stock screener

  Rating & Target

sell

-41%

Previous close

$7.29

 
Intrinsic value

$4.32

 
Up/down potential

-41%

 
Rating

sell

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 0001), $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 1.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,765
  1,805
  1,852
  1,904
  1,961
  2,025
  2,094
  2,168
  2,249
  2,335
  2,427
  2,526
  2,631
  2,742
  2,861
  2,986
  3,119
  3,259
  3,407
  3,564
  3,729
  3,903
  4,087
  4,280
  4,484
  4,698
  4,924
  5,162
  5,412
  5,675
Variable operating expenses, $m
  1,648
  1,684
  1,725
  1,771
  1,822
  1,878
  1,939
  2,005
  2,076
  2,152
  2,143
  2,230
  2,323
  2,421
  2,526
  2,636
  2,754
  2,878
  3,008
  3,147
  3,293
  3,446
  3,608
  3,779
  3,959
  4,149
  4,348
  4,558
  4,779
  5,011
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
  1,648
  1,684
  1,725
  1,771
  1,822
  1,878
  1,939
  2,005
  2,076
  2,152
  2,143
  2,230
  2,323
  2,421
  2,526
  2,636
  2,754
  2,878
  3,008
  3,147
  3,293
  3,446
  3,608
  3,779
  3,959
  4,149
  4,348
  4,558
  4,779
  5,011
Operating income, $m
  116
  121
  127
  133
  140
  147
  155
  164
  173
  183
  284
  296
  308
  321
  335
  349
  365
  381
  399
  417
  436
  457
  478
  501
  525
  550
  576
  604
  633
  664
EBITDA, $m
  694
  710
  728
  748
  771
  796
  823
  852
  884
  918
  954
  993
  1,034
  1,078
  1,124
  1,174
  1,226
  1,281
  1,339
  1,401
  1,466
  1,534
  1,607
  1,683
  1,763
  1,847
  1,936
  2,029
  2,127
  2,231
Interest expense (income), $m
  187
  151
  157
  163
  170
  179
  188
  197
  208
  220
  232
  246
  260
  275
  292
  309
  327
  347
  367
  389
  412
  437
  462
  489
  518
  548
  580
  613
  648
  685
  724
Earnings before tax, $m
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -44
  -47
  -49
  38
  36
  33
  29
  26
  22
  18
  14
  9
  5
  0
  -6
  -11
  -17
  -23
  -30
  -37
  -44
  -52
  -60
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  10
  10
  9
  8
  7
  6
  5
  4
  3
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -44
  -47
  -49
  28
  26
  24
  21
  19
  16
  13
  10
  7
  3
  0
  -6
  -11
  -17
  -23
  -30
  -37
  -44
  -52
  -60

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  8,779
  8,981
  9,212
  9,471
  9,758
  10,073
  10,416
  10,788
  11,188
  11,617
  12,076
  12,566
  13,088
  13,643
  14,231
  14,855
  15,515
  16,213
  16,951
  17,730
  18,552
  19,418
  20,332
  21,294
  22,308
  23,376
  24,499
  25,681
  26,925
  28,233
Adjusted assets (=assets-cash), $m
  8,779
  8,981
  9,212
  9,471
  9,758
  10,073
  10,416
  10,788
  11,188
  11,617
  12,076
  12,566
  13,088
  13,643
  14,231
  14,855
  15,515
  16,213
  16,951
  17,730
  18,552
  19,418
  20,332
  21,294
  22,308
  23,376
  24,499
  25,681
  26,925
  28,233
Revenue / Adjusted assets
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
Average production assets, $m
  6,723
  6,878
  7,055
  7,253
  7,473
  7,714
  7,977
  8,261
  8,568
  8,896
  9,248
  9,623
  10,023
  10,448
  10,899
  11,376
  11,882
  12,416
  12,981
  13,578
  14,207
  14,871
  15,570
  16,308
  17,084
  17,901
  18,762
  19,667
  20,619
  21,621
Working capital, $m
  -32
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -74
  -77
  -81
  -85
  -89
  -93
  -97
  -102
Total debt, $m
  2,491
  2,591
  2,705
  2,834
  2,976
  3,133
  3,303
  3,487
  3,685
  3,898
  4,126
  4,369
  4,628
  4,903
  5,195
  5,504
  5,832
  6,178
  6,544
  6,930
  7,338
  7,768
  8,221
  8,698
  9,201
  9,731
  10,288
  10,874
  11,491
  12,140
Total liabilities, $m
  4,354
  4,455
  4,569
  4,698
  4,840
  4,996
  5,166
  5,351
  5,549
  5,762
  5,990
  6,233
  6,492
  6,767
  7,059
  7,368
  7,696
  8,042
  8,408
  8,794
  9,202
  9,632
  10,085
  10,562
  11,065
  11,594
  12,152
  12,738
  13,355
  14,004
Total equity, $m
  4,425
  4,526
  4,643
  4,773
  4,918
  5,077
  5,250
  5,437
  5,639
  5,855
  6,086
  6,333
  6,596
  6,876
  7,173
  7,487
  7,820
  8,172
  8,543
  8,936
  9,350
  9,787
  10,247
  10,732
  11,243
  11,781
  12,348
  12,943
  13,570
  14,230
Total liabilities and equity, $m
  8,779
  8,981
  9,212
  9,471
  9,758
  10,073
  10,416
  10,788
  11,188
  11,617
  12,076
  12,566
  13,088
  13,643
  14,232
  14,855
  15,516
  16,214
  16,951
  17,730
  18,552
  19,419
  20,332
  21,294
  22,308
  23,375
  24,500
  25,681
  26,925
  28,234
Debt-to-equity ratio
  0.560
  0.570
  0.580
  0.590
  0.610
  0.620
  0.630
  0.640
  0.650
  0.670
  0.680
  0.690
  0.700
  0.710
  0.720
  0.740
  0.750
  0.760
  0.770
  0.780
  0.780
  0.790
  0.800
  0.810
  0.820
  0.830
  0.830
  0.840
  0.850
  0.850
Adjusted equity ratio
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -44
  -47
  -49
  28
  26
  24
  21
  19
  16
  13
  10
  7
  3
  0
  -6
  -11
  -17
  -23
  -30
  -37
  -44
  -52
  -60
Depreciation, amort., depletion, $m
  577
  588
  601
  616
  632
  649
  668
  689
  711
  735
  670
  697
  726
  757
  790
  824
  861
  900
  941
  984
  1,029
  1,078
  1,128
  1,182
  1,238
  1,297
  1,360
  1,425
  1,494
  1,567
Funds from operations, $m
  543
  553
  565
  578
  593
  608
  626
  644
  664
  686
  698
  723
  750
  779
  809
  841
  874
  910
  948
  987
  1,029
  1,072
  1,117
  1,165
  1,215
  1,267
  1,323
  1,381
  1,442
  1,507
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
Cash from operations, $m
  543
  553
  565
  579
  594
  610
  627
  646
  666
  687
  700
  725
  752
  781
  811
  843
  877
  912
  950
  990
  1,032
  1,075
  1,120
  1,168
  1,218
  1,271
  1,327
  1,385
  1,447
  1,512
Maintenance CAPEX, $m
  -478
  -487
  -498
  -511
  -526
  -542
  -559
  -578
  -599
  -621
  -645
  -670
  -697
  -726
  -757
  -790
  -824
  -861
  -900
  -941
  -984
  -1,029
  -1,078
  -1,128
  -1,182
  -1,238
  -1,297
  -1,360
  -1,425
  -1,494
New CAPEX, $m
  -132
  -155
  -177
  -198
  -220
  -241
  -263
  -284
  -306
  -329
  -352
  -375
  -400
  -425
  -451
  -478
  -506
  -535
  -565
  -596
  -629
  -664
  -700
  -737
  -776
  -817
  -860
  -905
  -952
  -1,002
Cash from investing activities, $m
  -610
  -642
  -675
  -709
  -746
  -783
  -822
  -862
  -905
  -950
  -997
  -1,045
  -1,097
  -1,151
  -1,208
  -1,268
  -1,330
  -1,396
  -1,465
  -1,537
  -1,613
  -1,693
  -1,778
  -1,865
  -1,958
  -2,055
  -2,157
  -2,265
  -2,377
  -2,496
Free cash flow, $m
  -67
  -88
  -110
  -131
  -152
  -173
  -195
  -217
  -239
  -262
  -297
  -320
  -345
  -371
  -397
  -425
  -453
  -483
  -514
  -547
  -581
  -618
  -657
  -697
  -740
  -784
  -831
  -880
  -931
  -984
Issuance/(repayment) of debt, $m
  92
  100
  114
  129
  142
  156
  170
  184
  198
  213
  228
  243
  259
  275
  292
  309
  327
  346
  366
  386
  408
  430
  453
  477
  503
  529
  557
  586
  617
  649
Issuance/(repurchase) of shares, $m
  129
  137
  153
  168
  184
  199
  215
  231
  248
  265
  203
  221
  239
  258
  278
  298
  319
  342
  365
  389
  414
  442
  472
  502
  534
  568
  603
  640
  679
  719
Cash from financing (excl. dividends), $m  
  221
  237
  267
  297
  326
  355
  385
  415
  446
  478
  431
  464
  498
  533
  570
  607
  646
  688
  731
  775
  822
  872
  925
  979
  1,037
  1,097
  1,160
  1,226
  1,296
  1,368
Total cash flow (excl. dividends), $m
  155
  149
  158
  166
  174
  182
  191
  199
  207
  216
  135
  144
  153
  163
  173
  183
  194
  205
  216
  228
  241
  254
  268
  282
  297
  313
  330
  347
  365
  384
Retained Cash Flow (-), $m
  -129
  -137
  -153
  -168
  -184
  -199
  -215
  -231
  -248
  -265
  -232
  -247
  -263
  -280
  -297
  -314
  -333
  -352
  -372
  -393
  -414
  -442
  -472
  -502
  -534
  -568
  -603
  -640
  -679
  -719
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
  26
  12
  5
  -2
  -10
  -17
  -25
  -33
  -41
  -49
  -97
  -103
  -110
  -117
  -124
  -131
  -139
  -147
  -155
  -164
  -173
  -188
  -204
  -220
  -237
  -255
  -273
  -293
  -314
  -335
Discount rate, %
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
  24
  11
  4
  -2
  -7
  -11
  -15
  -18
  -20
  -22
  -38
  -35
  -32
  -29
  -26
  -23
  -20
  -17
  -15
  -12
  -10
  -8
  -7
  -5
  -4
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  95.9
  91.8
  87.6
  83.3
  79.0
  74.6
  70.4
  66.2
  62.1
  58.2
  55.5
  52.7
  50.0
  47.4
  44.8
  42.3
  39.9
  37.5
  35.3
  33.1
  31.1
  29.1
  27.2
  25.4
  23.8
  22.2
  20.6
  19.2
  17.9
  16.6

CNX Resources Corp., formerly CONSOL Energy Inc., is an integrated energy company. The Company's divisions include Exploration and Production (E&P), Pennsylvania (PA) Mining Operations and Other. The E&P division operates through four segments: Marcellus Shale, Utica Shale, Coalbed Methane (CBM) and Other Gas, which produce pipeline quality natural gas for sale primarily to gas wholesalers. Its E&P division focuses on Appalachian area natural gas and liquids activities, including production, gathering, processing and acquisition of natural gas properties in the Appalachian Basin. The Other Gas segment is primarily related to shallow oil and gas production and the Chattanooga Shale in Tennessee. The principal activities of the PA Mining Operations division are mining, preparation and marketing of thermal coal, sold primarily to power generators. The Other division includes business activities, such as coal terminal operations and water operations.

FINANCIAL RATIOS  of  CNX Resources Corporation (CNX)

Valuation Ratios
P/E Ratio -2
Price to Sales 0.8
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 3.6
Price to Free Cash Flow 6.9
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 $1730 million for the last fiscal year's total revenue generated by CNX Resources Corporation. The default revenue input number comes from 0001 income statement of CNX Resources Corporation. 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 2% 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 5.5%, whose default value for CNX is calculated based on our internal credit rating of CNX Resources Corporation, 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 CNX Resources Corporation.
    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 93.5%.

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 6.3% for CNX Resources Corporation.

Corporate tax rate of 27% is the nominal tax rate for CNX Resources Corporation. 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 381%.

Life of production assets of 13.8 years is the average useful life of capital assets used in CNX Resources Corporation 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 -1.8%. 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 - $4329.958 million for CNX Resources Corporation - 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 198.509 million for CNX Resources Corporation 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 CNX Resources Corporation at the current share price and the inputted number of shares is $1.4 billion.

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