TALO
Talos Energy Inc.
$16.04
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Moderate
·
Conviction
Undervalued
Trading 29.6% below fair value
You pay
$16.04
Bear
$9.20
Fair
$22.77
Bull
$40.86
Bear
$9.20
-42.6%
FCF $318M × 8x
Fair
$22.77
+42.0%
FCF $454M × 11x
Bull
$40.86
+154.7%
FCF $590M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
7.8x
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 $15.25 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $22.77 per share.
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 $15.25 (from 13 analysts). Our estimate is 62% 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