CONSOL Energy (CNX) Stock Declining on Oil Price Downturn

CONSOL Energy (CNX) stock is slipping in early afternoon trading on Wednesday amid falling oil prices.
By Amanda Albright ,

NEW YORK (TheStreet) -- CONSOL Energy  (CNX) - Get Report  stock is plummeting, down 6.98% to $7.60 in early afternoon trading on Wednesday, as oil prices fall.

Oil prices are down after the American Petroleum Institute showed that U.S. stockpiles rose by 6.3 million barrels last week, which was higher than the 1.1 million increase that analysts projected, the Wall Street Journal reports. 

Crude oil (WTI) is falling by 2.76% to $42.99 per barrel this afternoon and Brent crude is lower by 2.97% to $46.03 per barrel, according to the CNBC.com index.

"The huge crude-oil build [reported by the API] weighs on oil prices along with mediocre Chinese economic data this morning...which keeps alive the fear of a growth slowdown in the huge country," Michael Poulsen, oil analyst at Global Risk Management, told the Journal.

Based in Canonsburg, PA, CONSOL Energy is an oil and gas E&P company as well as a coal mining company. 

Separately, TheStreet Ratings team rates CONSOL ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate CONSOL ENERGY INC (CNX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CONSOL ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $110.07 million or 62.43% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • CNX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 78.48%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • CNX's debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.28 is very low and demonstrates very weak liquidity.
  • CONSOL ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CONSOL ENERGY INC increased its bottom line by earning $0.73 versus $0.35 in the prior year. For the next year, the market is expecting a contraction of 138.3% in earnings (-$0.28 versus $0.73).
  • You can view the full analysis from the report here: CNX

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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