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Fri, Jan. 29, 3:44 PM
- Consol Energy (CNX +16.7%) says its free cash flow will enable it to ride out weak commodity prices, helping drive shares as much as 22% higher.
- CNX, whose $0.11/share loss was worse than expected, nevertheless said cash flow from operations rose to $102M in Q4 from $87M in the year-ago quarter.
- "With our internal free cash flow plan, we are confident we can ride out this volatile market," CFO David Khani said in today's earnings conference call.
- CNX also said it would continue to pay a dividend, after cutting its quarterly payout to $0.01/share from $0.625 last year.
- CNX also said it will temporarily idle its Harvey coal mine in Pennsylvania, months after it idled the Miller Creek Complex in West Virginia.
- Shares had plunged 77% over the previous year prior to today.
Fri, Jan. 22, 12:33 PM
- Morgan Stanley analyst Evan Kurt expects steel prices to continue to rise and average $445/ton in 2016, which he says may result in downward revisions to Wall Street estimates for U.S. Steel (X -1.2%), AK Steel (AKS -1%) and Nucor (NUE +0.2%).
- Kurt calls Steel Dynamics "the safest way to play a modest steel market recovery,” while heavily shorted names such as X and AKS could squeeze into results, "but we would sell the news."
- The firm rates STLD at Overweight with a $27 price target, while X, AKS and NUE are all rated Equal Weight with respective targets of $19, $5 and $59; Cliffs Natural Resources (CLF -7.3%), rated Underweight with a $2 target, is called a “high cost producer in an oversupplied iron ore market.”
- "No need to own coal names into the quarter,” Kurt writes, as coal market conditions have deteriorated with a warmer than normal winter leading to large build-ups of coal inventories; he downgrades Consol Energy (CNX -0.8%) and Foresight Energy (FELP +11.4%) to Equal Weight with respective $29 and $12 price target.
Thu, Jan. 21, 12:45 PM
Fri, Jan. 15, 10:57 AM
- The Obama administration announces it will place a moratorium on new leases for coal mining on public lands, while the Interior Department studies the environmental impact and conducts a review of leases that could take three years.
- The moratorium is limited to new coal leasing, with exceptions for the metallurgical coal used in steel production, and companies that already hold federal coal leases such as Peabody Energy (BTU -9.2%) can continue to mine those reserves during and after the moratorium.
- Nearly 40% of U.S. coal now comes from federal land, much of it from the Powder River Basin in Wyoming and Montana.
- KOL -4.5%, CLD -7.6%, CNX -6.6%, CLF -6.6%, WLB -5.3%, ARLP -2.5%.
Mon, Jan. 11, 2:49 PM
- Arch Coal (ACI -50.7%) is cut in half following news it has filed Chapter 11 bankruptcy and will be delisted from the NYSE, and the miner says its discussions with customers indicate that even after tumbling domestic coal demand the past eight years, "2016 pricing will remain weaker than previously anticipated."
- ACI's default on $3.2B of debt bring the metals and mining sector’s trailing 12-month default rate to 15% from 11% at the end of December and the default rate for the coal subsector an "unprecedented" 43%, according to Fitch Ratings.
- Analysts say investors should expect more such bankruptcies among commodity companies this year, as a strong dollar and slowing global demand growth should keep downward pressure on commodity prices.
- ACI's bankruptcy helps drag down other mining names today: BTU -19%, CNX -10.8%, YZC -2.3%, NRP -7.2%, CLD -11.4%, WLB -5.1%, ARLP +0.1%, KOL -2.6%.
Wed, Jan. 6, 7:52 AM
- Consol Energy (NYSE:CNX) -5.6% premarket after saying will cut the 2016 capex budget for its oil and gas division by 41%, now planning to spend $205M-$325M rather than its previous estimate of $400M-$500M.
- CNX says the capex reduction reflects continued benefits from drilling and completion efficiencies and the deferral of mainly wet gas completions into 2017; CNX believes it may partially offset the deferral of activity through potential production benefits related to additional gathering system debottlenecking projects in H2 2016.
- CNX also cuts its 2016 sales forecast for its coal division to 27M-32M tons from its earlier outlook for 30.6M-33.4M tons, and says it expects coal prices to fall further due to unusually warm winter weather and low natural gas prices; 2016 coal capex is estimated at $170M-$190M.
- Separately, CNX Coal Resources (NYSE:CNXC), which was spun off from Consol and mines coal used in power generation, cuts its 2016 sales forecast to 4.4M-5.2M tons from a previous outlook for 5M-5.4M tons.
Dec. 28, 2015, 12:57 PM
- Much like oil/gas firms (hurt by fresh oil price declines), coal, gold, and silver miners are having a rough day. End-of-year tax and fund selling could be playing a role. Comex gold is down a moderate 0.6%, and Comex silver down 3.2%. The S&P is down 0.5%.
- Notable coal decliners: Peabody Energy (BTU -13.6%), Westmoreland Coal (WLB -6.4%), CONSOL Energy (CNX -9%), and Cloud Peak Energy (CLD -4%).
- Notable gold decliners: Goldcorp (GG -3.5%), Barrick Gold (ABX -3.1%), Newmont Mining (NEM -4%), Kinross Gold (KGC -3.8%), Gold Fields (GFI -6.7%), AngloGold Ashanti (AU -5%), Harmony Gold (HMY -6.5%), and Sibanye Gold (SBGL -4.2%).
- Notable silver decliners: Silver Wheaton (SLW -3.8%), Pan American Silver (PAAS -3.6%), First Majestic Silver (AG -6.9%), Tahoe Resources (TAHO -4.9%), and Coeur Mining (CDE -5.8%).
- ETFs: GLD, SLV, IAU, AGQ, PSLV, PHYS, USLV, SIVR, SGOL, ZSL, UGL, DGP, GTU, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, OUNZ, DGL, DBS, DGZ, DGLD, USV, GEUR, UBG, GYEN, TONS, QGLDX
Dec. 11, 2015, 3:59 PM
- Consol Energy (CNX -8%) is sharply lower - along with nearly every other energy-related stock - despite announcing it had signed new supply deals for the next three years that are expected when coupled with other recent commitments to significantly improve production from its mines in Pennsylvania over its current projections.
- CNX says the new deals total ~10.8M tons while the other recent commitments add another 650K tons, and will increase its operations by 93% next year, by 61% in 2017 and by 49% in 2018, based on the 26M ton midpoint of its production guidance range.
- CNX also reaffirms a $50-$55 price range for committed tonnage across its entire coal division in 2016.
Nov. 20, 2015, 12:14 PM
- Peabody Energy (BTU -4.8%) and Cloud Peak Energy (CLD -5.1%) are downgraded to Sell at UBS, which says U.S. coal prices remain "cornered by market and regulatory forces."
- UBS says it sees the U.S. coal space remaining in a prolonged state of oversupply, with limited cost reduction potential left in the U.S. coal production base.
- "Any recovery in gas prices may come too late for the highly levered U.S. coal players, and even those with healthier balance sheets are having damage progressively inflicted as higher price legacy multi-year contracts roll off, cash burn continues, and utilities reduce forward coal purchases," UBS says.
- The firm maintains its Sell rating on Arch Coal (ACI -6.4%) and cuts its stock price target by 67% to $0.50; it also cuts targets for BTU by 82% to $6, CLD by 55% to $2.50, and Consol Energy (CNX -0.7%) by 10% to $9 with a Neutral rating.
Nov. 16, 2015, 10:11 AM
- Consol Energy (CNX +4.3%) pops higher in early trading after Greenlight Capital's David Einhorn offers a strong endorsement of the company at the Robin Hood conference.
- Einhorn calls CNX his "best idea" and says the Appalachia-based coal and natural gas production company has "plenty of overlooked good news," including a significant cost-cutting effort, an aggressive reduction in capital spending, and strong drilling results and a significant success at a test well in the Utica Shale.
- CNX is one of Greenlight's largest positions, with ~22.8M shares as of Sept. 30; Einhorn first purchased the stock in Q3 2014, with the stock price at $37.58 at the end of that quarter, but the stock opened today at $7.40.
Nov. 3, 2015, 11:58 AM
- Consol Energy (CNX +2.5%) extends yesterday's rebound even as Deutsche Bank’s Jorge Beristain downgrades his rating on the company to Sell from Hold while cutting his stock price target to $6 from $13.
- Beristain foresees further downside risk to CNX shares given that the gas outlook could be weaker than expected, as well as the company’s stressed balance sheet.
- Deutsche Bank lowers its 2016-17 EBITDA estimates to reflect its reduced outlook for natural gas prices and lower coal realizations, partially offset by higher nat gas volumes and cost improvements.
Oct. 27, 2015, 12:42 PM
Oct. 27, 2015, 12:38 PM
- Coal-focused Consol Energy (CNX -17.3%) and Peabody Energy (BTU -16.3%) are tanking after reporting Q3 earnings.
- CNX reported a $0.28/share loss, much weaker than analysts' expectations for a $0.05 loss, on revenue of $814M, better than the expected $723M; BTU's massive $8.13/share loss actually came in ahead of estimates.
- CNX, which in recent years has moved to shift more to natural gas, says it is beginning to see signs of potential improvement in the nat gas industry but offers no positive words for the coal industry, especially for thermal coal used to make electricity.
- In its earnings conference call, CNX execs declined comment about reports its joint venture in the Utica Shale with Hess could be sold.
- For BTU, Q3 Australian results rose as costs fell 28% Y/Y to $48.11/metric ton, benefiting from the low Australian dollar.
- BTU lowers its U.S. production guidance by 5M metric tons to 175M-185M, down from 180M-190M, with total sales volume, including Australia and trading and brokerage, cut to 222M-237M metric tons from 225M-245M.
Oct. 7, 2015, 12:41 PM
- Peabody Energy (BTU -8.9%) and Cloud Peak Energy (CLD -1.6%) give back some of yesterday's gains, as Morgan Stanley says coal prices could remain weak for a few more years and forecasts U.S. utility coal burn to fall by 75 metric tons Y/Y to 774 metric tons in 2015 and remain near that level until 2020.
- The firm downgrades BTU and CLD to Equal Weight from Overweight, saying both companies need an uptick in coal pricing to remain or return to free cash flow positive.
- Also: ACI -12.2%, WLB -1.4%, CNX +4.4%, ARLP +2.6%.
- Earlier: Things can't get much worse for coal after disastrous 2015, analyst says (Oct. 6)
Oct. 5, 2015, 3:42 PM
- Consol Energy (CNX +9.1%) is upgraded to Hold from Sell with a $13 price target at Deutsche Bank, which says the company's risk-reward position has become more balanced after shares sank 55% in Q3.
- Concerns related to CNX's balance sheet remain, however, and the company depends largely on successful asset sales in a crowded market, the firm says.
- At the same time, Deutsche Bank downgrades Freeport McMoRan (FCX +5.1%) to Hold from Buy with an $11 price target, cut from $17, saying the ongoing strain on FCX's balance sheet indicates the likelihood of further share issuances and diminished likelihood of the widely anticipated $2B-$3B E&P IPO.
Oct. 1, 2015, 12:34 PM
- Coal stocks (KOL -0.7%) are broadly lower after Moody's issues a weak forecast for the North American coal industry, saying the outlook "remains negative amid ongoing challenges for both metallurgical and thermal coal, including declining coal consumption and low met coal prices."
- The ratings agency forecasts a ~10% Y/Y decline in the industry's EBITDA for 2016, following the 25% drop it anticipates for 2015.
- BTU -10.7% after allowing for a 1-for-15 reverse split that took effect today; also ACI -5.4%, CNX -6.4%, WLB -5.1%, CLD -3%, ARLP -0.7%.
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