NEW YORK (TheStreet) -- Shares of CONSOL Energy (CNX) - Get CNX Resources Corporation Report stock is plummeting by 11.57% to $5.93 late Wednesday afternoon, as Brent oil fell below $30 per barrel for the first time since April 2004.
Crude oil (WTI) is down by 0.16% to $30.39 per barrel this afternoon and Brent oil is sinking by 2.3% to $30.15 per barrel, according to the CNBC.com index.
The dip comes on speculation that Iranian shipments will increase soon, Bloomberg reports.
Iran will send out 500,000 more barrels a day within a week of sanctions being lifted and 1 million within six months, Roknoddin Javadi, head of the National Iranian Oil Co. said last month, according to the Shana news agency, Bloomberg noted.
"The spread between Brent and WTI is coming in because Iranian sanctions could be lifted as early as Monday," Bob Yawger of Mizuho Securities USA told Bloomberg. "Additional Iranian barrels will have a much bigger impact on seaborne Brent than on WTI."
The Canonsburg, PA-based integrated energy company operates through two divisions: oil and gas exploration and production and coal mining.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CONSOL ENERGY INC as a Sell with a ratings score of D. This is driven by multiple weaknesses, 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 75.55%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 143.8% in earnings (-$0.32 versus $0.73).
- You can view the full analysis from the report here: CNX