MGY
Magnolia Oil & Gas Corporation
$29.24
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Moderate
·
Conviction
Overvalued
Trading 17.5% above fair value
You pay
$29.24
Bear
$12.23
Fair
$24.88
Bull
$41.74
Bear
$12.23
-58.2%
FCF $286M × 8x
Fair
$24.88
-14.9%
FCF $409M × 11x
Bull
$41.74
+42.8%
FCF $532M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
13.6x
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 $29.00 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $24.88 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