CNX Resources weighs in on new hydrogen tax credit rules By Investing.com

PITTSBURGH – CNX Resources Corporation (NYSE: NYSE: ) has accepted the recent determination by the U.S. Department of the Treasury to recognize coal mine methane (CMM) as a viable feedstock for hydrogen production. This recognition comes from the finalization of the Section 45V Hydrogen Production Tax Credit rules of the Inflation Reduction Act. The company, currently valued at about $5 billion, has shown a remarkable market performance of 80.81%. with profitability over the past year.

The company, which operates in the Appalachian region, said that while Treasury’s recognition of the environmental and economic benefits of CMM is a positive development, the final Section 45V rules appear too restrictive. CNX believes these rules do not offer sufficient economic incentives for hydrogen for use in expanding CMM’s capture operations.Based on a healthy gross profit margin of 60% and good financial health InvestingPro:which offers comprehensive analysis and 10+ additional ProTips for CNX, the company seems well positioned to navigate these challenges.

Despite reservations about the specifics of Rule 45V, CNX plans to use this validation and explore alternative ways to encourage CMM, such as voluntary markets, other tax incentives, and commercial opportunities for a compliance program.

CNX Resources prides itself on being an ultra-low-carbon-intensive natural gas development, production, midstream and technology company.With a 160-year history in one of the world’s energy-rich regions, CNX has 8.74 trillion cubic feet of proven natural gas reserves by 2023. As of December 31, the company is also a constituent of the Standard & Poor’s Midcap 400 Index.

CNX has included cautionary statements in its press release advising that forward-looking statements are subject to risks and uncertainties that could materially affect actual results, including factors such as market volatility , economic conditions, dependence on third-party facilities, industry conditions, debt obligations, strategic decisions, cyber security and regulatory changes InvestingPro: analysis, investors should note that CNX’s next earnings report is scheduled for January 23, 2025, which may provide important insights into the company’s strategic direction. For detailed financial analysis and fair value estimates, access CNX’s comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

This update is based on a press release from CNX Resources Corporation.

In other recent news, CNX Resources has been the subject of several significant developments. that this acquisition will close in the first quarter of 2025.

Meanwhile, Mizuho (NYSE:) Securities downgraded shares of CNX Resources from Neutral to Underperform, citing a cautious outlook for the company’s new business ventures.Despite CNX Resources’ solid performance, driven primarily by coal mine methane (CMM) production, Mizuho expressed skepticism about CMM inclusion of 45V (hydrogen) and 45Q (carbon capture) credits under the Inflation Reduction Act in the near future.

Meanwhile, Truist Securities adjusted its stance on CNX Resources stock twice, initially raising its price target on the stock from $34.00 to $35.00 following the Apex Energy acquisition announcement.However, CNX Resources’ third-quarter financials following the results, Truist Securities downgraded the stock from Buy to Hold and revised its price target from $34 to $38.

CNX Resources was also impacted by the National Weather Service’s forecast of moderate to mild weather in the Midwest for December, which resulted in significant declines in natural gas inventories, including CNX Resources. These recent developments underscore the dynamic nature of the energy market and CNX Resources’ strategic flexibility in response to these changing conditions.

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