Discounted Cash Flow (DCF) Analysis Levered

Marathon Oil Corporation (MRO)

$27.26

+0.38 (+1.41%)
All numbers are in Millions, Currency in USD
Stock DCF: 7.38 | 27.26 | overvalue

Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 4,3735,9025,0633,0975,6016,479.957,496.828,673.2810,034.3511,609.01
Revenue (%)
Operating Cash Flow 2,1293,2342,7491,4733,2393,410.623,945.844,565.045,281.426,110.22
Operating Cash Flow (%)
Capital Expenditure -1,974-2,753-2,550-1,343-1,046-2,646.29-3,061.57-3,542.01-4,097.85-4,740.91
Capital Expenditure (%)
Free Cash Flow 1554811991302,193764.32884.271,023.031,183.571,369.31

Weighted Average Cost Of Capital

Share price $ 27.26
Beta 2.767
Diluted Shares Outstanding 788
Cost of Debt
Tax Rate 5.78
After-tax Cost of Debt 6.03%
Risk-Free Rate
Market Risk Premium
Cost of Equity 15.846
Total Debt 4,014
Total Equity 21,480.88
Total Capital 25,494.88
Debt Weighting 15.74
Equity Weighting 84.26
Wacc

Build Up Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 4,3735,9025,0633,0975,6016,479.957,496.828,673.2810,034.3511,609.01
Operating Cash Flow 2,1293,2342,7491,4733,2393,410.623,945.844,565.045,281.426,110.22
Capital Expenditure -1,974-2,753-2,550-1,343-1,046-2,646.29-3,061.57-3,542.01-4,097.85-4,740.91
Free Cash Flow 1554811991302,193764.32884.271,023.031,183.571,369.31
WACC
PV LFCF 668.70676.85685.09693.44701.89
SUM PV LFCF 3,425.97

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 14.30
Free cash flow (t + 1) 1,396.69
Terminal Value 11,355.23
Present Value of Terminal Value 5,820.56

Intrinsic Value

Enterprise Value 9,246.53
Net Debt 3,434
Equity Value 5,812.53
Shares Outstanding 788
Equity Value Per Share 7.38