VAL
Valaris Limited
$85.32
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 66.1% above fair value
You pay
$85.32
Bear
$21.98
Fair
$51.36
Bull
$90.54
Bear
$21.98
-74.2%
FCF $264M × 8x
Fair
$51.36
-39.8%
FCF $378M × 11x
Bull
$90.54
+6.1%
FCF $491M × 14x
Adjust Assumptions
75.0$/bbl
11.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
17.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (54 analysts)
$86.00
Divergence from AlphaVal
40%
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $51.36 per share. Range: $21.98 (bear) to $90.54 (bull).
Warnings
If oil drops to $60/barrel, the stock could fall -74%. 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 $86.00 (from 54 analysts). Our estimate is 40% 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