TALO
Talos Energy Inc.
$16.80
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Undervalued
Trading 49.3% below fair value
You pay
$16.80
Bear
$14.29
Fair
$33.15
Bull
$58.30
Bear
$14.29
-14.9%
FCF $408M × 8x
Fair
$33.15
+97.3%
FCF $583M × 11x
Bull
$58.30
+247.0%
FCF $758M × 14x
Adjust Assumptions
75.0$/bbl
11.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
6.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$19.50
Divergence from AlphaVal
70%
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $33.15 per share. Range: $14.29 (bear) to $58.30 (bull).
Warnings
Debt per share ($5.27) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
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 $19.50 (from 13 analysts). Our estimate is 70% above 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