OII
Oceaneering International, Inc.
$38.77
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 73.6% above fair value
You pay
$38.77
Bear
$14.43
Fair
$22.33
Bull
$32.25
Bear
$14.43
-62.8%
FCF $85M × 10x
Fair
$22.33
-42.4%
FCF $109M × 13x
Bull
$32.25
-16.8%
FCF $134M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
33.6x
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 $36.50 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $22.33 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -73%. 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 $36.50 (from 44 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