Equinor, One Of The Greenest Oil Majors, Could Be Undervalued

Norwegian company Equinor (EQNR) (STOHF), once named Statoil, is one of the greenest big oil companies. Morningstar’s January 2020 report “Understanding the Emissions Challenge” evaluated each of the oil majors based on several metrics for carbon emissions reduction. Equinor was the only company to score in the top third in each metric.

In that context, I wanted to look at the company’s investment value. Equinor has three sources of value. The first is its Exploration and Production (E&P) operations, which explore for and produce oil and natural gas. The second is its Marketing, Midstream, and Processing (MMP) segment, which transports, processes, and sells oil, gas, and electricity. Finally, the company’s Other segment develops renewable energy projects and new oil and gas technologies, and also handles other corporate functions.

By adding up the value of these three parts, we can calculate the Equinor’s valuation. That valuation turns out to be around the same as the company’s enterprise value, which means Equinor could be undervalued. (Read More)