LSE:CNE

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Flawless balance sheet and fair value.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

17.0%

CNE

6.6%

GB Oil and Gas

8.6%

GB Market


1 Year Return

-35.5%

CNE

-34.7%

GB Oil and Gas

-19.4%

GB Market

Return vs Industry: CNE matched the UK Oil and Gas industry which returned -34.7% over the past year.

Return vs Market: CNE underperformed the UK Market which returned -19.4% over the past year.


Shareholder returns

CNEIndustryMarket
7 Day17.0%6.6%8.6%
30 Day44.5%8.4%-3.5%
90 Day-45.9%-34.0%-23.0%
1 Year-35.5%-35.5%-31.3%-34.7%-15.5%-19.4%
3 Year-48.2%-48.2%-8.5%-20.0%-8.8%-19.9%
5 Year-39.5%-39.5%-2.3%-21.9%4.2%-19.0%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CNE (£1.08) is trading below our estimate of fair value (£6.35)

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


Price To Earnings Ratio

PE vs Industry: CNE is poor value based on its PE Ratio (6.6x) compared to the Oil and Gas industry average (3.7x).

PE vs Market: CNE is good value based on its PE Ratio (6.6x) compared to the UK market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: CNE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CNE is overvalued based on its PB Ratio (0.5x) compared to the GB Oil and Gas industry average (0.5x).


Next Steps

Future Growth

How is Cairn Energy forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

-27.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNE's earnings are forecast to decline over the next 3 years (-27.4% per year).

Earnings vs Market: CNE's earnings are forecast to decline over the next 3 years (-27.4% per year).

High Growth Earnings: CNE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CNE's revenue (2.8% per year) is forecast to grow faster than the UK market (2.5% per year).

High Growth Revenue: CNE's revenue (2.8% 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?

-0.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CNE has a large one-off loss of $80.8M impacting its December 31 2019 financial results.

Growing Profit Margin: CNE became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CNE has become profitable over the past 5 years, growing earnings by -0.6% per year.

Accelerating Growth: CNE has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CNE has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (38.2%).


Return on Equity

High ROE: CNE's Return on Equity (8.2%) is considered low.


Next Steps

Financial Health

How is Cairn Energy's financial position?


Financial Position Analysis

Short Term Liabilities: CNE's short term assets ($424.2M) exceed its short term liabilities ($233.8M).

Long Term Liabilities: CNE's short term assets ($424.2M) exceed its long term liabilities ($399.7M).


Debt to Equity History and Analysis

Debt Level: CNE is debt free.

Reducing Debt: CNE had no debt 5 years ago.

Debt Coverage: CNE has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CNE has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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


Dividend Yield vs Market

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

How experienced are the management team and are they aligned to shareholders interests?

8.8yrs

Average management tenure


CEO

Simon Thomson (54yo)

8.75s

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 ($USD2.20M) is above average for companies of similar size in the UK market ($USD1.23M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Simon Thomson
CEO & Executive Director8.75yrsUS$2.20m0.23% $1.5m
James Smith
CFO & Executive Director5.92yrsUS$1.43m0.095% $594.7k
Paul Mayland
Chief Operating Officer7.25yrsno data0.11% $689.3k
David Nisbet
Head of Group Corporate Affairsno datano data0.019% $121.6k
Duncan Wood
Company Secretary21.5yrsno datano data
Eric Hathon
Director of Exploration13yrsno data0.0081% $51.1k

8.8yrs

Average Tenure

Experienced Management: CNE's management team is seasoned and experienced (8.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Simon Thomson
CEO & Executive Director8.75yrsUS$2.20m0.23% $1.5m
James Smith
CFO & Executive Director5.92yrsUS$1.43m0.095% $594.7k
Keith Lough
Independent Non-Executive Director4.92yrsUS$81.78kno data
W. L. L. Alison Wood
Independent Non Executive Director0.75yrno datano data
Ian Tyler
Independent Non-Executive Chairman5.92yrsUS$177.00kno data
Todd Hunt
Non-Executive Director16.92yrsUS$75.50k0.012% $77.8k
Nicoletta Giadrossi-Morel
Independent Non-Executive Director3.25yrsUS$81.78kno data
Catherine Krajicek
Independent Non-Executive Director0.75yrno datano data
Peter Kallos
Independent Non-Executive Director4.58yrsUS$75.50k0.0019% $11.8k

4.9yrs

Average Tenure

57yo

Average Age

Experienced Board: CNE's board of directors are considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CNE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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£629.312m
  • Shares outstanding: 582.70m
  • 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 independent oil and gas exploration, development, and production company. It holds a portfolio of exploration, development, and production assets in the United Kingdom, Israel, Mauritania, Senegal, Cote d’Ivoire, Mexico, and Suriname. The company was incorporated in 2002 and is headquartered in Edinburgh, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 04:13
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.