VAL
Valaris Limited
$101.17
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 91.6% above fair value
You pay
$101.17
Bear
$25.33
Fair
$52.79
Bull
$87.34
Bear
$25.33
-75.0%
FCF $157M × 10x
Fair
$52.79
-47.8%
FCF $203M × 13x
Bull
$87.34
-13.7%
FCF $248M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
37.5x
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 $96.00 from 54 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $52.79 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -86%. 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 $96.00 (from 54 analysts). Our estimate is 69% 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