ARLP - Consol Energy: P/FCF Of ~4x And Growing Cash Flows Indicate A Buy
2024-03-22 14:27:46 ET
Summary
- Consol Energy has extremely cheap valuations both in absolute and relative terms (i.e., compared to its historical valuation level and the sector).
- However, because of the strong cash generation and massive share buybacks, CEIX's stock price has surged higher, and that could potentially indicate an unfavorable entry point.
- Yet, the multiples have actually remained flat despite the recent run-up in the stock price. Namely, it has been CEIX's improving cash generation profile explaining the positive returns.
- Looking at the underlying fundamentals and outlook for 2024 and even in the longer-run, CEIX looks very cheap.
- In this article I outline the key reasons why I consider CEIX a clear buy.
CONSOL Energy Inc. ( CEIX ) is a U.S. based coal producer with a market cap of ~ $2.5 billion. Since it operates in the coal space, it's not that surprising that the underlying valuations are extremely cheap and clearly in deep value territory....
Consol Energy: P/FCF Of ~4x And Growing Cash Flows Indicate A Buy