DEC
Diversified Energy Company PLC
$15.49
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Undervalued
Trading 57.3% below fair value
You pay
$15.49
Bear
$17.17
Fair
$36.25
Bull
$61.69
Bear
$17.17
+10.9%
FCF $196M × 8x
Fair
$36.25
+134.0%
FCF $280M × 11x
Bull
$61.69
+298.2%
FCF $364M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
4.7x
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 $22.33 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $36.25 per share.
Warnings
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 $22.33 (from 6 analysts). Our estimate is 78% 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