(RTTNews) - FBR Capital Markets Monday reduced its price target on Consol Energy Inc. (CNX: News ), while reiterating the Outperform rating. In addition, the brokerage cut its 2009 and 2010 earnings estimates to account for higher operating costs.

Analyst David Khani said his view of owning the stock is based on eventual rising industrial demand, an increase in demand for NAPP as CAPP supply falls and increased scrubber installations, growth in domestic natural gas supply, strong met coal fundamentals, and improving export demand.

The brokerage trimmed its 2009 earnings estimates to $2.86 from $3.21 per share to reflect third-quarter results, which were weaker-than-expected, and higher cost estimates for the fourth quarter. FBR lowered the 2010 earnings estimates to $3.31 from $3.70 per share, primarily to reflect slightly higher cost estimates and lower realized prices than its expectations from 2010 reopener tons.

FBR believes in the company's asset base, recognizing the undervalued long-life reserve quality. It sees the met coal assets as the deep value part of the story, in part from the inconsistent operating history and secondarily from its below-market contracting history that should improve significantly as it expands into Asia.
The brokerage lowered its price target to $64 from $66 per share. The revised price target represents a 4.8x EV/EBITDA multiple on the company's 2012 estimates.

CNX closed Friday's regular trade at $46.84, down from the previous close of $46.93, on 2.35 million shares.

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by RTT Staff Writer

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