Procore signs multi-year strategic collaboration agreement with AWS
On Wednesday, JPMorgan reiterated its Underweight rating and $33.00 price target for CNX Resources shares (NYSE:CNX), forecasting a quarter in line with operational expectations but financials that fall short of the Street's consensus. The stock has experienced significant pressure, dropping nearly 12% in the past week, though InvestingPro analysis suggests the current price level presents an undervalued opportunity. According to InvestingPro's Fair Value model, which factors in multiple valuation metrics and market conditions, CNX appears to be trading below its intrinsic value. According to JPMorgan, CNX Resources is expected to produce first quarter results that align with volume expectations but with cash flow per share (CFPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) below consensus estimates.
The firm is projecting CNX to post a CFPS of $1.42, compared to the Street's estimate of $1.63, and an EBITDA of $294 million, which is lower than the $311 million consensus. For context, CNX's trailing twelve-month EBITDA stands at $489.5 million, with a market capitalization of $4.19 billion. JPMorgan attributes the potential discrepancy between CFPS and EBITDA to differences in share count estimates, noting that they are including the dilutive effects of convertible notes in their calculations.
JPMorgan anticipates that CNX will report first quarter production of 1,641 million cubic feet equivalent per day (MMcfe/d), which is consistent with the Street's estimate of 1,644 MMcfe/d. Capital expenditure (capex) for the quarter is estimated at $142 million, closely aligned with the Street's expectation of $145 million. CNX has previously indicated that its approximately $475 million capex budget for 2025 will be heavily weighted towards the first half of the year.
The analyst firm also estimates CNX's pre-hedged gas price realization for the first quarter at $3.56 per thousand cubic feet (Mcf), which is a $0.10 per Mcf differential to the NYMEX benchmark price of $3.66 per Mcf. Furthermore, JPMorgan forecasts $108 million in free cash flow (FCF) for the quarter, with an expectation of $54 million in share buybacks, representing 50% of FCF. The firm notes a slowdown in buybacks during the fourth quarter of 2024, which may have been influenced by a higher share price and a potential blackout period due to the pending Apex acquisition.
In conclusion, JPMorgan has reiterated its Underweight rating and December 2025 price target of $33 for CNX Resources, which reflects 80% of the firm's blended net asset value (NAV) calculation. With CNX's next earnings report scheduled for April 24, 2025, investors seeking deeper insights can access comprehensive analysis through InvestingPro, which offers exclusive financial health scores, detailed valuation metrics, and expert-curated ProTips. The platform reveals 8 additional key insights about CNX that could impact its investment outlook.
In other recent news, CNX Resources reported a significant earnings miss for the fourth quarter of 2024, with an earnings per share (EPS) of -$0.97, falling short of the expected $0.43. The company's revenue also missed the forecast, coming in at $136.58 million against an anticipated $424.4 million. Despite these results, CNX Resources is focusing on maintaining flat production in 2024, with potential acceleration in 2025. On the analyst front, Mizuho (NYSE:MFG) Securities adjusted its price target for CNX Resources to $35 while maintaining an Underperform rating, citing expectations of misses in EBITDA and cash flow per share for the first quarter of 2025. Meanwhile, Stephens upgraded CNX Resources from Equal Weight to Overweight, setting a new price target of $48, based on an optimistic net asset value (NAV) estimate. Raymond (NSE:RYMD) James also upgraded CNX Resources to Market Perform, acknowledging the challenges posed by the company's extensive hedging strategy in the current natural gas market. These developments reflect a varied analyst outlook, with some firms seeing potential despite the company's hedging challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.