| Relative Valuation: Noble Energy versus Its Peers | |
| | |
|
What's Keeping Noble Energy on Its Knees? (Continued from Prior Part) Noble Energy’s relative valuation
The average EV/EBITDA ( enterprise value to earnings before interest, tax, depreciation, and amortization) ratio for the upstream industry is ~12.2x. With ~8x, Noble Energy (NBL) has a higher forward EV/EBITDA ratio than offshore player Murphy Oil (MUR), which has a ratio of ~4x. However, when compared with Cimarex Energy (XEC), which has a forward EV/EBITDA ratio of ~11, Noble Energy’s valuation appears to be cheaper. Occidental Petroleum (OXY) and Pioneer Natural Resources (PXD) have forward EV/EBITDA ratios of 9x and 10x, respectively, which are also higher than Noble Energy’s. Therefore, Noble Energy’s valuation appears to be at the lower end in its peer group.
The table above shows fundamental ratios for S&P 500 (SPY) upstream companies that share similar production mixes and geographical areas of operation with Noble Energy. Even when compared based on the price-to-book value ratio , Noble Energy appears much cheaper with a ratio of ~1.1x. Based on the price-to-sales ratio , with a ratio of ~4.3x, the company is midrange within its peer group.
Why is Noble Energy trading at a discount?
Companies with higher leverage or lower current ratios are trading at discounts to their book values or have lower price-to-sales ratios. One possible explanation for this could be fear of an energy-driven debt crisis if commodity prices stay low for much longer than anticipated. Also, given the rising interest rates at a time when energy companies are so indebted and scrambling for access to capital, interest expenses for highly leveraged companies could rise further.
As of 3Q15, within its peer group, Noble Energy has a high debt-to-equity ratio, with ~65%, and a low current ratio, with ~1.2. Therefore, it’s trading at a discount to its peers.
Continue to Next Part Browse this series on Market Realist:
|
|
|
Noble Energy
|
|
|
CODE : NBL |
ISIN : US6550441058 |
|
| |
ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Noble Energy est une société de production minière basée aux Etats-Unis D'Amerique. Noble Energy est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 4,9 milliards US$ (4,1 milliards €). La valeur de son action a atteint son plus haut niveau récent le 09 mai 2008 à 97,39 US$, et son plus bas niveau récent le 31 août 2020 à 10,00 US$. Noble Energy possède 492 191 992 actions en circulation. |