We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CONSOL Energy's Initiatives to Boost Liquidity Amid Crisis
Read MoreHide Full Article
CONSOL Energy (CEIX - Free Report) and CONSOL Coal Resources LP have collectively taken some steps to boost finances and liquidity amid the ongoing pandemic.
Since the second half of 2020, these firms have tried to create value through multiple transactions that included land and mineral asset sales, gas wells and coal reserves outside of its active operations. Courtesy of the initiatives, CONSOL Energy and CONSOL Coal are expected to generate $60-$70 million and $9-$10 million, respectively. These companies are also looking forward to other ways for strengthening their respective balance sheets.
CONSOL Energy, a producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal, is expected to utilize the funds generated from these initiatives to strengthen the balance sheet through open market repurchases and will work to position it well to take advantage of a potential coal market recovery.
Near-Term Coal Outlook Dull, 2021 Holds Some Promise
Coal is gradually losing ground to natural gas and renewable energy. The novel coronavirus outbreak and the resultant decline in commercial and industrial activities further affected coal demand. The latest report from U.S. Energy Information Administration (“EIA”) forecasts 2020 coal consumption in the United States to fall to 475.1 million short tons (MMst), indicating a 19.1% decline from 2019 levels of 587.3 MMst. Demand for electricity from industrial customers is expected to drop 11% in 2020 due to the coronavirus pandemic, while coal demand from the electric power sector is expected to drop nearly 20% in 2020.
However, in 2021, the scenario might change if the prediction made by EIA in their latest release comes true. EIA predicts coal production to increase 17% from the expected 2020 levels to 600 MMst in 2021. This projection takes into consideration the rising demand for coal because of higher natural gas prices than 2020. Moreover, the 2020 Steam Electric Reconsideration Rule from the U.S. Environmental Protection Agency will aid the coal industry.
Coal stocks like SunCoke Energy, Inc. (SXC - Free Report) and Contura Energy (CTRA - Free Report) , among others, are well poised to gain from the expected recovery in coal demand.
In the past three months, its shares have underperformed the industry.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot stocks we're targeting >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
CONSOL Energy's Initiatives to Boost Liquidity Amid Crisis
CONSOL Energy (CEIX - Free Report) and CONSOL Coal Resources LP have collectively taken some steps to boost finances and liquidity amid the ongoing pandemic.
Since the second half of 2020, these firms have tried to create value through multiple transactions that included land and mineral asset sales, gas wells and coal reserves outside of its active operations. Courtesy of the initiatives, CONSOL Energy and CONSOL Coal are expected to generate $60-$70 million and $9-$10 million, respectively. These companies are also looking forward to other ways for strengthening their respective balance sheets.
CONSOL Energy, a producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal, is expected to utilize the funds generated from these initiatives to strengthen the balance sheet through open market repurchases and will work to position it well to take advantage of a potential coal market recovery.
Near-Term Coal Outlook Dull, 2021 Holds Some Promise
Coal is gradually losing ground to natural gas and renewable energy. The novel coronavirus outbreak and the resultant decline in commercial and industrial activities further affected coal demand. The latest report from U.S. Energy Information Administration (“EIA”) forecasts 2020 coal consumption in the United States to fall to 475.1 million short tons (MMst), indicating a 19.1% decline from 2019 levels of 587.3 MMst. Demand for electricity from industrial customers is expected to drop 11% in 2020 due to the coronavirus pandemic, while coal demand from the electric power sector is expected to drop nearly 20% in 2020.
However, in 2021, the scenario might change if the prediction made by EIA in their latest release comes true. EIA predicts coal production to increase 17% from the expected 2020 levels to 600 MMst in 2021. This projection takes into consideration the rising demand for coal because of higher natural gas prices than 2020. Moreover, the 2020 Steam Electric Reconsideration Rule from the U.S. Environmental Protection Agency will aid the coal industry.
Coal stocks like SunCoke Energy, Inc. (SXC - Free Report) and Contura Energy (CTRA - Free Report) , among others, are well poised to gain from the expected recovery in coal demand.
Zacks Rank
CONSOL Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
In the past three months, its shares have underperformed the industry.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>