MUR
Murphy Oil Corporation
$38.76
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 61.1% above fair value
You pay
$38.76
Bear
$3.75
Fair
$24.06
Bull
$51.13
Bear
$3.75
-90.3%
FCF $277M × 8x
Fair
$24.06
-37.9%
FCF $396M × 11x
Bull
$51.13
+31.9%
FCF $515M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
18.6x
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 $38.91 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $24.06 per share.
Warnings
Debt per share ($12.73) 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 -93%. 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 $38.91 (from 36 analysts). Our estimate is 55% below 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