RRC
Range Resources Corporation
$43.02
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 173.8% above fair value
You pay
$43.02
Bear
$5.11
Fair
$15.71
Bull
$29.84
Bear
$5.11
-88.1%
FCF $321M × 8x
Fair
$15.71
-63.5%
FCF $459M × 11x
Bull
$29.84
-30.6%
FCF $596M × 14x
Adjust Assumptions
75.0$/bbl
11.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
24.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (62 analysts)
$44.11
Divergence from AlphaVal
64%
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $15.71 per share. Range: $5.11 (bear) to $29.84 (bull).
Warnings
If oil drops to $60/barrel, the stock could fall -88%. 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 $44.11 (from 62 analysts). Our estimate is 64% 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