Discounted Cash Flow (DCF) Analysis Levered

Marathon Oil Corporation (MRO)

$27.39

+1.10 (+4.18%)
All numbers are in Millions, Currency in USD
Stock DCF: 29.56 | 27.39 | undervalue

Free Cash Flow

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 5,9025,0633,0975,6017,5408,716.7110,077.0611,649.7113,467.8015,569.62
Revenue (%)
Operating Cash Flow 3,2342,7491,4733,2395,4284,994.185,773.586,674.627,716.288,920.50
Operating Cash Flow (%)
Capital Expenditure -2,753-2,550-1,343-1,046-1,450-3,108.05-3,593.10-4,153.85-4,802.11-5,551.54
Capital Expenditure (%)
Free Cash Flow 4811991302,1933,9781,886.132,180.482,520.772,914.173,368.96

Weighted Average Cost Of Capital

Share price $ 27.39
Beta 2.376
Diluted Shares Outstanding 687
Cost of Debt
Tax Rate 4.42
After-tax Cost of Debt 3.66%
Risk-Free Rate
Market Risk Premium
Cost of Equity 15.840
Total Debt 5,923
Total Equity 18,816.93
Total Capital 24,739.93
Debt Weighting 23.94
Equity Weighting 76.06
Wacc

Build Up Free Cash Flow

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 5,9025,0633,0975,6017,5408,716.7110,077.0611,649.7113,467.8015,569.62
Operating Cash Flow 3,2342,7491,4733,2395,4284,994.185,773.586,674.627,716.288,920.50
Capital Expenditure -2,753-2,550-1,343-1,046-1,450-3,108.05-3,593.10-4,153.85-4,802.11-5,551.54
Free Cash Flow 4811991302,1933,9781,886.132,180.482,520.772,914.173,368.96
WACC
PV LFCF 1,670.321,710.061,750.741,792.381,835.02
SUM PV LFCF 8,758.52

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.92
Free cash flow (t + 1) 3,436.34
Terminal Value 31,468.31
Present Value of Terminal Value 17,140.33

Intrinsic Value

Enterprise Value 25,898.85
Net Debt 5,589
Equity Value 20,309.85
Shares Outstanding 687
Equity Value Per Share 29.56