EQUINOR ASA (EQNR.OL) Stock Fundamental Analysis
Europe - Euronext Oslo - OSL:EQNR - NO0010096985 - Common Stock
249.7 NOK
+6.7 (+2.76%)
Taking everything into account, EQNR scores 6 out of 10 in our fundamental rating. EQNR was compared to 75 industry peers in the Oil, Gas & Consumable Fuels industry. While EQNR has a great profitability rating, there are some minor concerns on its financial health. EQNR is cheap, but on the other hand it scores bad on growth. This makes EQNR very considerable for value investing!
1. Profitability
1.1 Basic Checks
- In the past year EQNR was profitable.
- In the past year EQNR had a positive cash flow from operations.
- Of the past 5 years EQNR 4 years were profitable.
- EQNR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- EQNR has a Return On Assets of 4.22%. This is in the better half of the industry: EQNR outperforms 62.67% of its industry peers.
- EQNR has a better Return On Equity (14.13%) than 80.00% of its industry peers.
- EQNR has a better Return On Invested Capital (22.60%) than 98.67% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for EQNR is significantly above the industry average of 8.82%.
- The 3 year average ROIC (33.11%) for EQNR is well above the current ROIC(22.60%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 14.13% | ||
| ROIC | 22.6% |
ROA(3y)11.06%
ROA(5y)6.92%
ROE(3y)32.85%
ROE(5y)20.85%
ROIC(3y)33.11%
ROIC(5y)25.12%
1.3 Margins
- Looking at the Profit Margin, with a value of 5.35%, EQNR is in line with its industry, outperforming 45.33% of the companies in the same industry.
- EQNR's Profit Margin has improved in the last couple of years.
- The Operating Margin of EQNR (27.99%) is better than 73.33% of its industry peers.
- In the last couple of years the Operating Margin of EQNR has grown nicely.
- The Gross Margin of EQNR (48.66%) is comparable to the rest of the industry.
- EQNR's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.99% | ||
| PM (TTM) | 5.35% | ||
| GM | 48.66% |
OM growth 3Y-8.38%
OM growth 5Y5.28%
PM growth 3Y-3.8%
PM growth 5Y23.92%
GM growth 3Y-5.36%
GM growth 5Y-0.73%
2. Health
2.1 Basic Checks
- EQNR has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- EQNR has less shares outstanding than it did 1 year ago.
- EQNR has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for EQNR is higher compared to a year ago.
2.2 Solvency
- EQNR has an Altman-Z score of 2.47. This is not the best score and indicates that EQNR is in the grey zone with still only limited risk for bankruptcy at the moment.
- EQNR has a Altman-Z score of 2.47. This is in the better half of the industry: EQNR outperforms 62.67% of its industry peers.
- The Debt to FCF ratio of EQNR is 4.56, which is a neutral value as it means it would take EQNR, 4.56 years of fcf income to pay off all of its debts.
- EQNR has a Debt to FCF ratio of 4.56. This is in the better half of the industry: EQNR outperforms 66.67% of its industry peers.
- EQNR has a Debt/Equity ratio of 0.62. This is a neutral value indicating EQNR is somewhat dependend on debt financing.
- EQNR has a worse Debt to Equity ratio (0.62) than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 4.56 | ||
| Altman-Z | 2.47 |
ROIC/WACC2.73
WACC8.27%
2.3 Liquidity
- EQNR has a Current Ratio of 1.23. This is a normal value and indicates that EQNR is financially healthy and should not expect problems in meeting its short term obligations.
- EQNR has a Current ratio (1.23) which is in line with its industry peers.
- EQNR has a Quick Ratio of 1.12. This is a normal value and indicates that EQNR is financially healthy and should not expect problems in meeting its short term obligations.
- EQNR has a Quick ratio of 1.12. This is in the better half of the industry: EQNR outperforms 61.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.23 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
- The earnings per share for EQNR have decreased strongly by -28.57% in the last year.
- EQNR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.82% yearly.
- The Revenue has been growing slightly by 2.15% in the past year.
- EQNR shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.24% yearly.
EPS 1Y (TTM)-28.57%
EPS 3Y-2.27%
EPS 5Y16.82%
EPS Q2Q%-53.16%
Revenue 1Y (TTM)2.15%
Revenue growth 3Y4.92%
Revenue growth 5Y10.24%
Sales Q2Q%2.14%
3.2 Future
- The Earnings Per Share is expected to decrease by -0.02% on average over the next years.
- The Revenue is expected to decrease by -4.76% on average over the next years.
EPS Next Y-16.15%
EPS Next 2Y-6.05%
EPS Next 3Y-1.5%
EPS Next 5Y-0.02%
Revenue Next Year0.77%
Revenue Next 2Y-4.32%
Revenue Next 3Y-2.5%
Revenue Next 5Y-4.76%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 10.98, the valuation of EQNR can be described as very reasonable.
- Based on the Price/Earnings ratio, EQNR is valued a bit cheaper than the industry average as 77.33% of the companies are valued more expensively.
- EQNR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 8.88, the valuation of EQNR can be described as reasonable.
- Based on the Price/Forward Earnings ratio, EQNR is valued cheaply inside the industry as 82.67% of the companies are valued more expensively.
- EQNR's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.98 | ||
| Fwd PE | 8.88 |
4.2 Price Multiples
- 97.33% of the companies in the same industry are more expensive than EQNR, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, EQNR is valued cheaper than 81.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.33 | ||
| EV/EBITDA | 1.34 |
4.3 Compensation for Growth
- EQNR has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.65
EPS Next 2Y-6.05%
EPS Next 3Y-1.5%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 6.05%, EQNR is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 5.11, EQNR pays a better dividend. On top of this EQNR pays more dividend than 84.00% of the companies listed in the same industry.
- EQNR's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.05% |
5.2 History
- On average, the dividend of EQNR grows each year by 24.62%, which is quite nice.
Dividend Growth(5Y)24.62%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- EQNR pays out 101.05% of its income as dividend. This is not a sustainable payout ratio.
- The Dividend Rate of EQNR has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP101.05%
EPS Next 2Y-6.05%
EPS Next 3Y-1.5%
EQUINOR ASA / EQNR.OL FAQ
What is the ChartMill fundamental rating of EQUINOR ASA (EQNR.OL) stock?
ChartMill assigns a fundamental rating of 6 / 10 to EQNR.OL.
What is the valuation status of EQUINOR ASA (EQNR.OL) stock?
ChartMill assigns a valuation rating of 7 / 10 to EQUINOR ASA (EQNR.OL). This can be considered as Undervalued.
How profitable is EQUINOR ASA (EQNR.OL) stock?
EQUINOR ASA (EQNR.OL) has a profitability rating of 7 / 10.
What is the financial health of EQUINOR ASA (EQNR.OL) stock?
The financial health rating of EQUINOR ASA (EQNR.OL) is 5 / 10.
What is the expected EPS growth for EQUINOR ASA (EQNR.OL) stock?
The Earnings per Share (EPS) of EQUINOR ASA (EQNR.OL) is expected to decline by -16.15% in the next year.