Goldman Sachs (NYSE:GS) took the knife to the price target of Consol Energy Inc. (NYSE:CNX), cutting their price target on the company after missing earnings per share estimates in the last quarter.
Even, Goldman did say they liked the high margin businesses of the company, and still maintain a "Buy" rating on them.
Goldman said in a note to clients, "Despite the challenges, we remain Buy-rated ,as we like CNX's high-margin businesses and see shares as undervalued on a SOTP basis with risk/reward positive. Assuming historic average multiples, we believe shares are discounting HH gas prices per MMBtu of $4.00 for 2011 and $4.50 in 2012 with little credit for asset sales and West VA Marcellus resource upside potential. We believe natural gas prices are at the lower end of a $3.50-$5.00 NT trading range, likely limiting further downside to Buy-side estimates and sentiment. Street expectations for 2011-2012 coal volumes have been reset lower. We see $2-$3/share of upside from the sale of met coal assets and $2-$7/share if WV drilling results are positive."
Consol closed Monday at $36.91, gaining $0.15, or 0.41 percent. Goldman has a price target of $44 on them, lowering it from $47.
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