MUR
Murphy Oil Corporation
$42.96
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 84.7% above fair value
You pay
$42.96
Bear
$5.60
Fair
$23.26
Bull
$46.82
Bear
$5.60
-87.0%
FCF $328M × 8x
Fair
$23.26
-45.8%
FCF $469M × 11x
Bull
$46.82
+9.0%
FCF $610M × 14x
Adjust Assumptions
75.0$/bbl
11.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
17.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$39.40
Divergence from AlphaVal
41%
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $23.26 per share. Range: $5.60 (bear) to $46.82 (bull).
Warnings
If oil drops to $60/barrel, the stock could fall -87%. 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 $39.40 (from 36 analysts). Our estimate is 41% 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