Briefing From The Editor — EQNR Stock

Equinor has moved -0.1% so far today on a volume of 934,604, compared to its average of 3,119,831. In contrast, the S&P 500 index moved 0.3%.

Over the last 52 weeks, the stock moved 33.8%, with a high of $42.53 and a low of $26.26. During this time, the stock underperformed the S&P 500 index by 54.0%. Equinor, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The large-cap Energy company has 21,126 full time employees and is based in Stavanger, Norway. Equinor has returned a 2.2% dividend yield over the last 12 months.

The Company Has Inconsistent Margins and Cash Flows:

2018-12-31 2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $78,555 $62,911 $45,753 $88,744
Revenue Growth n/a -19.9% -27.3% 94.0%
Gross Margins 39.2% 32.07% 20.83% 47.18%
Gross Margins Growth n/a -18.19% -35.05% 126.5%
Operating Margins 24.68% 13.8% -8.5% 37.13%
Operating Margins Growth n/a -44.08% -161.59% 536.82%
Free Cash Flow (MM) $8,327 $3,545 $1,910 $20,776
FCF Growth n/a -57.43% -46.12% 987.75%
Net Debt / EBITDA 0.64 1.09 2.5 0.48

Basic Valuation Metrics Show Equinor asa Is Undervalued:

Compared to the Energy sector's average of 9.11, Equinor has a trailing twelve month price to earnings (P/E) ratio of 4.9 and, based on its Eps guidance of 5.77, an expected P/E ratio of 6.4. The firm's price to earnings growth (PEG) is 0.87, which indicates that the company is undervalued in terms of its expected earnings growth. Equinor's price to book (P/B) ratio is 2.7 compared to its sector average of 1.45.

As of the date of publication, the company is trading -23.6% below their Graham number, implying there is a margin of safety for the stock. We calculate the Graham number as follows:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 7.55 * 13.566) = $48.01

There is Mixed Market Sentiment About Equinor:

2 analysts are following Equinor and have set target prices ranging from $32 to $42.86 per share. On average, they have given the company a rating of buy. At today's prices, EQNR is trading -1.98% away from its average analyst target price of $37.43 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.