CNX Resources stock initiated at Equalweight by Barclays on defensive strategy

Investing.com - Barclays (LON:BARC) initiated coverage on CNX Resources (NYSE:CNX) with an Equalweight rating and a price target of $33.00 on Monday. According to InvestingPro data, the stock currently trades near $32, with analyst targets ranging from $25 to $40, reflecting the market’s mixed outlook. The company’s beta of 0.67 indicates relatively low volatility compared to the broader market.

The research firm highlighted CNX’s differentiated approach among gas exploration and production companies, noting its emphasis on cash flow stability through programmatic hedging and aggressive share buybacks.

Barclays pointed out that CNX has reduced its share count by approximately 32% since 2021, which has delivered valuation support for the stock.

The firm noted this strategy has come with tradeoffs, including elevated leverage at 1.8 times net debt to EBITDX compared to the peer average of approximately 0.5 times, and a rigid hedging profile with 77% of 2026 estimated volumes locked in at $2.69 and about 58% of 2027 estimated volumes at $3.28 per thousand cubic feet.

Barclays indicated that CNX’s higher leverage reinforces its need for hedging, which limits the company’s upside participation in what the firm describes as a structurally tightening gas market.

In other recent news, CNX Resources Corporation reported its Q1 2025 earnings, revealing an earnings per share (EPS) of -1.34, which fell short of the anticipated 0.61. However, the company exceeded revenue expectations, reporting $551.09 million compared to the forecasted $517.08 million. Additionally, CNX Resources has announced a leadership change, appointing Alan Shepard as the new President while he continues in his role as Chief Financial Officer. This executive move was unanimously approved by the board, reflecting confidence in Shepard’s leadership. The company also reported maintaining a robust share buyback program, with $125 million executed in Q1 2025. Despite the earnings miss, CNX Resources emphasized its focus on free cash flow per share rather than specific production targets. Analysts from firms like JPMorgan and ROTH Capital Partners (WA:CPAP) have shown interest in CNX’s financial management and capital allocation strategies. The company remains committed to its strategic initiatives and continues to monitor market conditions closely.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.