Discounted Cash Flow (DCF) Analysis Levered

Marathon Oil Corporation (MRO)

$24.09

-0.22 (-0.91%)
All numbers are in Millions, Currency in USD
Stock DCF: 36.74 | 24.09 | 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 $ 24.09
Beta 2.400
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 15.065
Total Debt 5,923
Total Equity 16,549.83
Total Capital 22,472.83
Debt Weighting 26.36
Equity Weighting 73.64
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 1,768.611,854.721,945.022,039.722,139.03
SUM PV LFCF 9,747.11

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.35
Free cash flow (t + 1) 3,905.56
Terminal Value 37,734.88
Present Value of Terminal Value 21,080.34

Intrinsic Value

Enterprise Value 30,827.45
Net Debt 5,589
Equity Value 25,238.45
Shares Outstanding 687
Equity Value Per Share 36.74