MGY
Magnolia Oil & Gas Corporation
$27.05
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Overvalued
Trading 7.3% above fair value
You pay
$27.05
Bear
$12.40
Fair
$25.21
Bull
$42.30
Bear
$12.40
-54.2%
FCF $286M × 8x
Fair
$25.21
-6.8%
FCF $409M × 11x
Bull
$42.30
+56.4%
FCF $532M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
12.6x
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 $30.33 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $25.21 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.
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