Discounted Cash Flow (DCF) Analysis Levered

Marathon Oil Corporation (MRO)

$22.28

-0.68 (-2.96%)
All numbers are in Millions, Currency in USD
Stock DCF: 38.60 | 22.28 | 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 5,9025,0633,0975,6018,0369,468.0311,155.2413,143.1215,485.2518,244.74
Revenue (%)
Operating Cash Flow 3,2342,7491,4733,2395,4285,340.506,292.187,413.468,734.5510,291.05
Operating Cash Flow (%)
Capital Expenditure -2,753-2,550-1,343-1,046-1,450-3,353.46-3,951.06-4,655.14-5,484.69-6,462.07
Capital Expenditure (%)
Free Cash Flow 4811991302,1933,9781,987.032,341.122,758.323,249.853,828.98

Weighted Average Cost Of Capital

Share price $ 22.28
Beta 2.384
Diluted Shares Outstanding 687
Cost of Debt
Tax Rate 4.42
After-tax Cost of Debt 4.78%
Risk-Free Rate
Market Risk Premium
Cost of Equity 14.754
Total Debt 5,923
Total Equity 15,306.36
Total Capital 21,229.36
Debt Weighting 27.90
Equity Weighting 72.10
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 5,9025,0633,0975,6018,0369,468.0311,155.2413,143.1215,485.2518,244.74
Operating Cash Flow 3,2342,7491,4733,2395,4285,340.506,292.187,413.468,734.5510,291.05
Capital Expenditure -2,753-2,550-1,343-1,046-1,450-3,353.46-3,951.06-4,655.14-5,484.69-6,462.07
Free Cash Flow 4811991302,1933,9781,987.032,341.122,758.323,249.853,828.98
WACC
PV LFCF 1,774.611,867.331,964.892,067.552,175.58
SUM PV LFCF 9,849.97

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 11.97
Free cash flow (t + 1) 3,905.56
Terminal Value 39,173.12
Present Value of Terminal Value 22,257.67

Intrinsic Value

Enterprise Value 32,107.64
Net Debt 5,589
Equity Value 26,518.64
Shares Outstanding 687
Equity Value Per Share 38.60