LSE:CNE

Stock Analysis Report

Executive Summary

Cairn Energy PLC operates as an oil and gas exploration, development, and production company.

Rewards

Trading at 36.2% below its fair value

Earnings are forecast to grow 9.35% per year

Risk Analysis

No risks detected for CNE from our risk checks.


Snowflake Analysis

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Cairn Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CNE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.7%

CNE

1.0%

GB Oil and Gas

0.9%

GB Market


1 Year Return

7.0%

CNE

0.7%

GB Oil and Gas

8.7%

GB Market

Return vs Industry: CNE exceeded the UK Oil and Gas industry which returned 0.7% over the past year.

Return vs Market: CNE underperformed the UK Market which returned 8.7% over the past year.


Shareholder returns

CNEIndustryMarket
7 Day-3.7%1.0%0.9%
30 Day-4.1%-6.6%-0.5%
90 Day-6.6%-2.8%0.9%
1 Year7.0%7.0%5.9%0.7%14.3%8.7%
3 Year-21.2%-21.2%20.7%5.3%18.8%3.6%
5 Year4.6%4.6%69.5%36.7%42.6%9.9%

Price Volatility Vs. Market

How volatile is Cairn Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cairn Energy undervalued compared to its fair value and its price relative to the market?

36.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CNE (£1.74) is trading below our estimate of fair value (£2.72)

Significantly Below Fair Value: CNE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CNE is unprofitable, so we can't compare its PE Ratio to the Oil and Gas industry average.

PE vs Market: CNE is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CNE's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CNE is overvalued based on its PB Ratio (0.9x) compared to the GB Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Cairn Energy forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNE is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: CNE is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CNE's is expected to become profitable in the next 3 years.

Revenue vs Market: CNE's revenue (3.1% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: CNE's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CNE is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Cairn Energy performed over the past 5 years?

-6.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CNE is currently unprofitable.

Growing Profit Margin: CNE is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CNE is unprofitable, and losses have increased over the past 5 years at a rate of -6.4% per year.

Accelerating Growth: Unable to compare CNE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CNE is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (24.7%).


Return on Equity

High ROE: CNE has a negative Return on Equity (-39.55%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cairn Energy's financial position?


Financial Position Analysis

Short Term Liabilities: CNE's short term assets ($264.8M) exceed its short term liabilities ($211.3M).

Long Term Liabilities: CNE's short term assets ($264.8M) do not cover its long term liabilities ($540.1M).


Debt to Equity History and Analysis

Debt Level: CNE's debt to equity ratio (6.3%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if CNE's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: CNE has a high level of physical assets or inventory.

Debt Coverage by Assets: CNE's debt is covered by short term assets (assets are 2.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable CNE has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: CNE is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 44.3% per year.


Next Steps

Dividend

What is Cairn Energy's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.2%industryaverage5.5%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate CNE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CNE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CNE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CNE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CNE's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

What is the CEO of Cairn Energy's salary, the management and board of directors tenure and is there insider trading?

8.4yrs

Average management tenure


CEO

Simon Thomson (54yo)

8.4yrs

Tenure

US$2,204,001

Compensation

Mr. Simon John Thomson has been the Chief Executive Officer of Cairn Energy Plc (Holding Company of Agora Oil and Gas AS) since July 1, 2011. Mr. Thomson serves as Chief Executive Officer of Cairn Energy p ...


CEO Compensation Analysis

Compensation vs Market: Simon's total compensation ($USD2.20M) is about average for companies of similar size in the UK market ($USD1.84M).

Compensation vs Earnings: Simon's compensation has been consistent with company performance over the past year.


Management Age and Tenure

8.4yrs

Average Tenure

Experienced Management: CNE's management team is seasoned and experienced (8.4 years average tenure).


Board Age and Tenure

4.6yrs

Average Tenure

57yo

Average Age

Experienced Board: CNE's board of directors are considered experienced (4.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$24,31014 Mar 19
Miles Warner
EntityIndividual
Shares15,000
Max PriceUS$1.62

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Duncan Wood

    Company Secretary

    • Tenure: 21.2yrs
  • David Nisbet

    Head of Group Corporate Affairs

    • Tenure: 0yrs
  • Simon Thomson (54yo)

    CEO & Executive Director

    • Tenure: 8.4yrs
    • Compensation: US$2.20m
  • Paul Mayland

    Chief Operating Officer

    • Tenure: 6.9yrs
  • James Smith (42yo)

    CFO & Executive Director

    • Tenure: 5.6yrs
    • Compensation: US$1.43m
  • Eric Hathon

    Director of Exploration

    • Tenure: 12.7yrs

Board Members

  • Keith Lough (60yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: US$81.78k
  • W. L. L. Alison Wood (56yo)

    Independent Non Executive Director

    • Tenure: 0.4yrs
  • Ian Tyler (59yo)

    Non-Executive Chairman

    • Tenure: 5.6yrs
    • Compensation: US$177.00k
  • Todd Hunt (66yo)

    Non-Executive Director

    • Tenure: 16.6yrs
    • Compensation: US$75.50k
  • Nicoletta Giadrossi-Morel (53yo)

    Independent Non-Executive Director

    • Tenure: 2.9yrs
    • Compensation: US$81.78k
  • Simon Thomson (54yo)

    CEO & Executive Director

    • Tenure: 8.4yrs
    • Compensation: US$2.20m
  • Cathy Krajicek (57yo)

    Independent Non-Executive Director

    • Tenure: 0.4yrs
  • James Smith (42yo)

    CFO & Executive Director

    • Tenure: 5.6yrs
    • Compensation: US$1.43m
  • Peter Kallos (60yo)

    Independent Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: US$75.50k

Company Information

Cairn Energy PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cairn Energy PLC
  • Ticker: CNE
  • Exchange: LSE
  • Founded: 2002
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: UK£1.008b
  • Shares outstanding: 580.61m
  • Website: https://www.cairnenergy.com

Number of Employees


Location

  • Cairn Energy PLC
  • 50 Lothian Road
  • Edinburgh
  • EH3 9BY
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CRNZ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
CNELSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
FKGCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
CNELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
CRNC.YOTCPK (Pink Sheets LLC)ADR NEWUSUSDOct 2008

Biography

Cairn Energy PLC operates as an oil and gas exploration, development, and production company. The company holds a portfolio of exploration, development, and production assets in the United Kingdom; Norway; ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 21:06
End of Day Share Price2019/12/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.