MRC
MRC Global Inc.
$13.78
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Undervalued
Trading 49.5% below fair value
You pay
$13.78
Bear
$14.19
Fair
$27.26
Bull
$43.69
Bear
$14.19
+3.0%
FCF $192M × 10x
Fair
$27.26
+97.9%
FCF $248M × 13x
Bull
$43.69
+217.1%
FCF $304M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
6.8x
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 $16.33 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $27.26 per share.
Warnings
Debt per share ($5.98) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
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 $16.33 (from 30 analysts). Our estimate is 96% 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