RRC
Range Resources Corporation
$41.05
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 68.9% above fair value
You pay
$41.05
Bear
$7.10
Fair
$24.30
Bull
$47.23
Bear
$7.10
-82.7%
FCF $263M × 8x
Fair
$24.30
-40.8%
FCF $376M × 11x
Bull
$47.23
+15.1%
FCF $488M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
29.1x
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 $46.86 from 62 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $24.30 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -91%. 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 $46.86 (from 62 analysts). Our estimate is 74% 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