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Equinor ASA ADR EQNR

Morningstar Rating
$24.76 −0.45 (1.79%)
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Company Report

Equinor Earnings: Selloff on Lower Payouts an Overreaction

Equinor’s shares fell as result of fourth-quarter earnings missing expectations and management decreasing the extraordinary dividend. The sharp selloff looks to be an overreaction, in our view. Quarterly adjusted earnings decreased to $8.7 billion before tax and $1.9 billion after tax, compared with $17.0 billion and $4.7 billion last year, respectively, as oil and gas prices continue to fall from extraordinary levels. Equinor posted operating cash flow, excluding working capital and taxes, of $10.9 billion during the quarter compared with $21.0 billion in 2022. The after-tax earnings figure came in below expectations due to a higher-than-expected tax rate from one-off items. Underlying segment operating earnings actually outperformed Equinor’s analyst-compiled consensus figures. As such, we do not view the earnings miss as warranting such a share price drop.

Price vs Fair Value

EQNR is trading at a 27% discount.
Price
$24.76
Fair Value
$51.00
Uncertainty
High
1-Star Price
$25.10
5-Star Price
$54.10
Economic Moat
Fql
Capital Allocation
Ggzckqm

Bulls Say, Bears Say

Bulls

Recent discoveries on the NCS in the Barents Sea indicate that resources remain and allow the company to use existing infrastructure to add incremental production at high returns.

Bears

Equinor's investments in renewables might not generate the returns its oil and gas investments historically have, resulting in a dilution of returns.

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News

Trading Information

Previous Close Price
$25.21
Day Range
$24.7225.02
52-Week Range
$24.4434.73
Bid/Ask
$24.78 / $25.11
Market Cap
$72.77 Bil
Volume/Avg
4.8 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
7.22
Price/Sales
0.70
Dividend Yield (Trailing)
4.85%
Dividend Yield (Forward)
4.85%
Total Yield
12.47%

Company Profile

Equinor is a Norway-based integrated oil and gas company. It has been publicly listed since 2001, but the government retains a 67% stake. Operating primarily on the Norwegian Continental Shelf, the firm produced 2.0 million barrels of oil equivalent per day in 2022 (50% liquids) and ended the year with 5.2 billion barrels of proven reserves (49% liquidsl). Operations also include offshore wind, solar, oil refineries and natural gas processing, marketing, and trading.
Sector
Energy
Industry
Oil & Gas Integrated
Stock Style Box
Large Value
Total Number of Employees
21,500

Competitors

Valuation

Metric
EQNR
BP
CVX
Price/Earnings (Normalized)
7.226.7611.01
Price/Book Value
1.501.461.74
Price/Sales
0.700.501.44
Price/Cash Flow
3.802.997,318.15
Price/Earnings
EQNR
BP
CVX

Financial Strength

Metric
EQNR
BP
CVX
Quick Ratio
1.530.740.84
Current Ratio
1.791.211.25
Interest Coverage
33.4211.7477.06
Quick Ratio
EQNR
BP
CVX

Profitability

Metric
EQNR
BP
CVX
Return on Assets (Normalized)
21.72%5.56%10.12%
Return on Equity (Normalized)
63.93%23.00%16.29%
Return on Invested Capital (Normalized)
39.68%12.36%14.39%
Return on Assets
EQNR
BP
CVX
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E
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