CIVI
Civitas Resources, Inc.
$27.38
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Undervalued
Trading 50.9% below fair value
You pay
$27.38
Bear
$6.04
Fair
$55.80
Bull
$122.16
Bear
$6.04
-77.9%
FCF $625M × 8x
Fair
$55.80
+103.8%
FCF $893M × 11x
Bull
$122.16
+346.2%
FCF $1161M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
7.6x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $33.00 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $55.80 per share.
Warnings
Debt per share ($51.78) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
If oil drops to $60/barrel, the stock could fall -75%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $33.00 (from 16 analysts). Our estimate is 92% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential