It's been a great afternoon session for Equinor investors, who saw their shares rise 4.1% to a price of $23.6 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
Equinor Has Attractive Multiples and Its Shares Are on Sale:
Equinor ASA, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally. The company belongs to the Energy sector, which has an average price to earnings (P/E) ratio of 13.62 and an average price to book (P/B) ratio of 1.86. In contrast, Equinor has a trailing 12 month P/E ratio of 7.2 and a P/B ratio of 1.47.
Equinor has moved -28.2% over the last year compared to 32.8% for the S&P 500 — a difference of -61.0%. Equinor has a 52 week high of $33.24 and a 52 week low of $22.15.
Growing Revenues With No Capital Eexpenditures:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $79,593 | $64,357 | $45,818 | $90,924 | $150,806 | $107,174 |
| Operating Margins | 25% | 14% | -7% | 37% | 52% | 33% |
| Net Margins | 9% | 3% | -12% | 9% | 19% | 11% |
| Net Income (M) | $7,538 | $1,851 | -$5,496 | $8,576 | $28,744 | $11,904 |
| Net Interest Expense (M) | -$1,263 | -$7 | -$836 | -$2,080 | -$207 | $2,114 |
| Depreciation & Amort. (M) | $9,249 | $13,204 | $9,515 | $10,432 | $8,878 | $9,373 |
| Diluted Shares (M) | 3,335 | 3,334 | 3,277 | 3,254 | 3,183 | 2,945 |
| Earnings Per Share | $2.27 | $0.55 | -$1.69 | $2.63 | $9.03 | $3.93 |
| EPS Growth | n/a | -75.77% | -407.27% | 255.62% | 243.35% | -56.48% |
| Free Cash Flow (M) | $19,694 | $13,749 | $10,386 | $28,816 | $26,525 | $14,126 |
| Total Debt (M) | $23,264 | $21,754 | $29,118 | $27,404 | $24,141 | $22,230 |
| Net Debt / EBITDA | 0.53 | 0.74 | 3.67 | 0.3 | 0.1 | 0.28 |
| Current Ratio | 1.57 | 1.27 | 1.58 | 1.59 | 1.77 | 1.71 |
Equinor has strong operating margins with a positive growth rate and positive EPS growth. Additionally, the company's financial statements display a decent current ratio of 1.71 and healthy leverage levels. Furthermore, Equinor has positive cash flows.
