Intrinsic value of Hess Corporation - HES

Previous Close

$61.20

  Intrinsic Value

$7.65

stock screener

  Rating & Target

str. sell

-88%

Previous close

$61.20

 
Intrinsic value

$7.65

 
Up/down potential

-88%

 
Rating

str. sell

We calculate the intrinsic value of HES stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 18.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  30.30
  27.77
  25.49
  23.44
  21.60
  19.94
  18.45
  17.10
  15.89
  14.80
  13.82
  12.94
  12.15
  11.43
  10.79
  10.21
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.24
  7.02
  6.82
  6.63
  6.47
  6.32
  6.19
Revenue, $m
  8,425
  10,765
  13,509
  16,676
  20,278
  24,322
  28,808
  33,734
  39,095
  44,881
  51,085
  57,695
  64,702
  72,098
  79,876
  88,031
  96,559
  105,461
  114,739
  124,397
  134,444
  144,888
  155,742
  167,021
  178,743
  190,926
  203,594
  216,769
  230,477
  244,748
Variable operating expenses, $m
  16,932
  21,624
  27,128
  33,479
  40,702
  48,811
  57,808
  67,687
  78,438
  90,043
  102,447
  115,703
  129,756
  144,588
  160,186
  176,539
  193,643
  211,495
  230,101
  249,470
  269,617
  290,562
  312,330
  334,949
  358,456
  382,890
  408,293
  434,715
  462,206
  490,825
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  16,932
  21,624
  27,128
  33,479
  40,702
  48,811
  57,808
  67,687
  78,438
  90,043
  102,447
  115,703
  129,756
  144,588
  160,186
  176,539
  193,643
  211,495
  230,101
  249,470
  269,617
  290,562
  312,330
  334,949
  358,456
  382,890
  408,293
  434,715
  462,206
  490,825
Operating income, $m
  -8,507
  -10,859
  -13,619
  -16,803
  -20,424
  -24,490
  -29,000
  -33,953
  -39,343
  -45,161
  -51,362
  -58,008
  -65,054
  -72,490
  -80,310
  -88,509
  -97,084
  -106,034
  -115,362
  -125,073
  -135,174
  -145,675
  -156,588
  -167,928
  -179,714
  -191,964
  -204,700
  -217,946
  -231,729
  -246,077
EBITDA, $m
  -6,054
  -7,736
  -9,708
  -11,984
  -14,572
  -17,478
  -20,702
  -24,242
  -28,094
  -32,252
  -36,710
  -41,460
  -46,496
  -51,811
  -57,400
  -63,260
  -69,389
  -75,786
  -82,453
  -89,394
  -96,613
  -104,118
  -111,918
  -120,024
  -128,447
  -137,202
  -146,305
  -155,773
  -165,624
  -175,879
Interest expense (income), $m
  338
  387
  592
  838
  1,127
  1,460
  1,838
  2,264
  2,735
  3,253
  3,817
  4,425
  5,078
  5,773
  6,510
  7,287
  8,105
  8,963
  9,859
  10,795
  11,771
  12,786
  13,843
  14,941
  16,082
  17,268
  18,501
  19,782
  21,114
  22,499
  23,941
Earnings before tax, $m
  -8,894
  -11,451
  -14,457
  -17,930
  -21,884
  -26,328
  -31,264
  -36,689
  -42,596
  -48,978
  -55,788
  -63,086
  -70,826
  -78,999
  -87,597
  -96,614
  -106,046
  -115,893
  -126,158
  -136,844
  -147,960
  -159,517
  -171,529
  -184,011
  -196,982
  -210,464
  -224,481
  -239,060
  -254,228
  -270,018
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -8,894
  -11,451
  -14,457
  -17,930
  -21,884
  -26,328
  -31,264
  -36,689
  -42,596
  -48,978
  -55,788
  -63,086
  -70,826
  -78,999
  -87,597
  -96,614
  -106,046
  -115,893
  -126,158
  -136,844
  -147,960
  -159,517
  -171,529
  -184,011
  -196,982
  -210,464
  -224,481
  -239,060
  -254,228
  -270,018

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  27,178
  34,725
  43,578
  53,794
  65,413
  78,456
  92,928
  108,820
  126,112
  144,779
  164,789
  186,112
  208,716
  232,575
  257,664
  283,970
  311,481
  340,197
  370,126
  401,282
  433,689
  467,379
  502,393
  538,778
  576,589
  615,891
  656,754
  699,253
  743,475
  789,508
Adjusted assets (=assets-cash), $m
  27,178
  34,725
  43,578
  53,794
  65,413
  78,456
  92,928
  108,820
  126,112
  144,779
  164,789
  186,112
  208,716
  232,575
  257,664
  283,970
  311,481
  340,197
  370,126
  401,282
  433,689
  467,379
  502,393
  538,778
  576,589
  615,891
  656,754
  699,253
  743,475
  789,508
Revenue / Adjusted assets
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
Average production assets, $m
  21,265
  27,171
  34,097
  42,091
  51,182
  61,387
  72,711
  85,145
  98,675
  113,281
  128,938
  145,622
  163,308
  181,976
  201,607
  222,189
  243,715
  266,184
  289,601
  313,979
  339,336
  365,696
  393,092
  421,561
  451,147
  481,898
  513,870
  547,124
  581,724
  617,743
Working capital, $m
  -480
  -614
  -770
  -951
  -1,156
  -1,386
  -1,642
  -1,923
  -2,228
  -2,558
  -2,912
  -3,289
  -3,688
  -4,110
  -4,553
  -5,018
  -5,504
  -6,011
  -6,540
  -7,091
  -7,663
  -8,259
  -8,877
  -9,520
  -10,188
  -10,883
  -11,605
  -12,356
  -13,137
  -13,951
Total debt, $m
  10,209
  14,451
  19,426
  25,167
  31,697
  39,028
  47,161
  56,092
  65,810
  76,301
  87,547
  99,530
  112,234
  125,642
  139,742
  154,526
  169,987
  186,126
  202,946
  220,455
  238,668
  257,602
  277,280
  297,728
  318,978
  341,066
  364,031
  387,915
  412,768
  438,639
Total liabilities, $m
  15,274
  19,516
  24,491
  30,232
  36,762
  44,093
  52,226
  61,157
  70,875
  81,366
  92,612
  104,595
  117,299
  130,707
  144,807
  159,591
  175,052
  191,191
  208,011
  225,520
  243,733
  262,667
  282,345
  302,793
  324,043
  346,131
  369,096
  392,980
  417,833
  443,704
Total equity, $m
  11,904
  15,210
  19,087
  23,562
  28,651
  34,364
  40,703
  47,663
  55,237
  63,413
  72,178
  81,517
  91,418
  101,868
  112,857
  124,379
  136,429
  149,006
  162,115
  175,761
  189,956
  204,712
  220,048
  235,985
  252,546
  269,760
  287,658
  306,273
  325,642
  345,805
Total liabilities and equity, $m
  27,178
  34,726
  43,578
  53,794
  65,413
  78,457
  92,929
  108,820
  126,112
  144,779
  164,790
  186,112
  208,717
  232,575
  257,664
  283,970
  311,481
  340,197
  370,126
  401,281
  433,689
  467,379
  502,393
  538,778
  576,589
  615,891
  656,754
  699,253
  743,475
  789,509
Debt-to-equity ratio
  0.860
  0.950
  1.020
  1.070
  1.110
  1.140
  1.160
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.230
  1.240
  1.240
  1.250
  1.250
  1.250
  1.250
  1.260
  1.260
  1.260
  1.260
  1.260
  1.260
  1.270
  1.270
  1.270
  1.270
Adjusted equity ratio
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -8,894
  -11,451
  -14,457
  -17,930
  -21,884
  -26,328
  -31,264
  -36,689
  -42,596
  -48,978
  -55,788
  -63,086
  -70,826
  -78,999
  -87,597
  -96,614
  -106,046
  -115,893
  -126,158
  -136,844
  -147,960
  -159,517
  -171,529
  -184,011
  -196,982
  -210,464
  -224,481
  -239,060
  -254,228
  -270,018
Depreciation, amort., depletion, $m
  2,452
  3,124
  3,911
  4,819
  5,852
  7,012
  8,299
  9,712
  11,249
  12,909
  14,652
  16,548
  18,558
  20,679
  22,910
  25,249
  27,695
  30,248
  32,909
  35,679
  38,561
  41,556
  44,670
  47,905
  51,267
  54,761
  58,394
  62,173
  66,105
  70,198
Funds from operations, $m
  -6,441
  -8,328
  -10,546
  -13,110
  -16,032
  -19,316
  -22,965
  -26,977
  -31,347
  -36,069
  -41,136
  -46,538
  -52,269
  -58,320
  -64,687
  -71,365
  -78,351
  -85,645
  -93,248
  -101,165
  -109,399
  -117,961
  -126,859
  -136,106
  -145,715
  -155,703
  -166,087
  -176,887
  -188,123
  -199,820
Change in working capital, $m
  -112
  -133
  -156
  -181
  -205
  -230
  -256
  -281
  -306
  -330
  -354
  -377
  -399
  -422
  -443
  -465
  -486
  -507
  -529
  -551
  -573
  -595
  -619
  -643
  -668
  -694
  -722
  -751
  -781
  -813
Cash from operations, $m
  -6,330
  -8,195
  -10,390
  -12,930
  -15,827
  -19,086
  -22,710
  -26,696
  -31,042
  -35,740
  -40,782
  -46,161
  -51,869
  -57,899
  -64,244
  -70,900
  -77,865
  -85,138
  -92,720
  -100,614
  -108,827
  -117,366
  -126,240
  -135,463
  -145,047
  -155,009
  -165,365
  -176,136
  -187,342
  -199,006
Maintenance CAPEX, $m
  -1,854
  -2,416
  -3,088
  -3,875
  -4,783
  -5,816
  -6,976
  -8,263
  -9,676
  -11,213
  -12,873
  -14,652
  -16,548
  -18,558
  -20,679
  -22,910
  -25,249
  -27,695
  -30,248
  -32,909
  -35,679
  -38,561
  -41,556
  -44,670
  -47,905
  -51,267
  -54,761
  -58,394
  -62,173
  -66,105
New CAPEX, $m
  -4,948
  -5,905
  -6,927
  -7,994
  -9,091
  -10,205
  -11,323
  -12,434
  -13,530
  -14,606
  -15,657
  -16,684
  -17,686
  -18,668
  -19,631
  -20,582
  -21,526
  -22,469
  -23,417
  -24,378
  -25,357
  -26,361
  -27,396
  -28,469
  -29,586
  -30,751
  -31,972
  -33,254
  -34,600
  -36,018
Cash from investing activities, $m
  -6,802
  -8,321
  -10,015
  -11,869
  -13,874
  -16,021
  -18,299
  -20,697
  -23,206
  -25,819
  -28,530
  -31,336
  -34,234
  -37,226
  -40,310
  -43,492
  -46,775
  -50,164
  -53,665
  -57,287
  -61,036
  -64,922
  -68,952
  -73,139
  -77,491
  -82,018
  -86,733
  -91,648
  -96,773
  -102,123
Free cash flow, $m
  -13,132
  -16,516
  -20,404
  -24,798
  -29,701
  -35,107
  -41,009
  -47,393
  -54,248
  -61,558
  -69,312
  -77,497
  -86,104
  -95,124
  -104,554
  -114,392
  -124,640
  -135,302
  -146,385
  -157,901
  -169,863
  -182,287
  -195,193
  -208,602
  -222,537
  -237,027
  -252,099
  -267,784
  -284,116
  -301,130
Issuance/(repayment) of debt, $m
  3,537
  4,242
  4,975
  5,742
  6,530
  7,330
  8,133
  8,931
  9,718
  10,491
  11,246
  11,983
  12,704
  13,408
  14,100
  14,783
  15,461
  16,139
  16,820
  17,510
  18,213
  18,934
  19,678
  20,448
  21,250
  22,088
  22,965
  23,885
  24,852
  25,871
Issuance/(repurchase) of shares, $m
  11,660
  14,757
  18,334
  22,404
  26,973
  32,041
  37,602
  43,649
  50,170
  57,154
  64,552
  72,425
  80,727
  89,449
  98,586
  108,135
  118,096
  128,471
  139,266
  150,490
  162,155
  174,274
  186,865
  199,947
  213,544
  227,679
  242,379
  257,675
  273,597
  290,180
Cash from financing (excl. dividends), $m  
  15,197
  18,999
  23,309
  28,146
  33,503
  39,371
  45,735
  52,580
  59,888
  67,645
  75,798
  84,408
  93,431
  102,857
  112,686
  122,918
  133,557
  144,610
  156,086
  168,000
  180,368
  193,208
  206,543
  220,395
  234,794
  249,767
  265,344
  281,560
  298,449
  316,051
Total cash flow (excl. dividends), $m
  2,065
  2,482
  2,905
  3,348
  3,802
  4,264
  4,727
  5,187
  5,641
  6,087
  6,486
  6,912
  7,327
  7,733
  8,133
  8,527
  8,918
  9,308
  9,701
  10,099
  10,505
  10,920
  11,349
  11,794
  12,256
  12,739
  13,245
  13,776
  14,334
  14,921
Retained Cash Flow (-), $m
  -11,660
  -14,757
  -18,334
  -22,404
  -26,973
  -32,041
  -37,602
  -43,649
  -50,170
  -57,154
  -64,552
  -72,425
  -80,727
  -89,449
  -98,586
  -108,135
  -118,096
  -128,471
  -139,266
  -150,490
  -162,155
  -174,274
  -186,865
  -199,947
  -213,544
  -227,679
  -242,379
  -257,675
  -273,597
  -290,180
Prev. year cash balance distribution, $m
  491
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -9,104
  -12,275
  -15,429
  -19,057
  -23,171
  -27,777
  -32,876
  -38,462
  -44,529
  -51,068
  -58,066
  -65,514
  -73,400
  -81,716
  -90,454
  -99,609
  -109,178
  -119,163
  -129,565
  -140,391
  -151,650
  -163,353
  -175,515
  -188,153
  -201,287
  -214,939
  -229,134
  -243,899
  -259,263
  -275,259
Discount rate, %
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
  -8,720
  -11,215
  -13,385
  -15,622
  -17,857
  -20,013
  -22,014
  -23,786
  -25,262
  -26,386
  -27,117
  -27,428
  -27,310
  -26,772
  -25,839
  -24,552
  -22,964
  -21,137
  -19,140
  -17,045
  -14,921
  -12,833
  -10,837
  -8,980
  -7,296
  -5,808
  -4,526
  -3,449
  -2,568
  -1,867
Current shareholders' claim on cash, %
  60.1
  36.6
  22.5
  14.0
  8.8
  5.5
  3.5
  2.3
  1.5
  1.0
  0.6
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Hess Corporation is an exploration and production company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids (NGL) and natural gas. The Company's segments include Exploration and Production, and Bakken Midstream. Its Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, NGLs and natural gas with production operations primarily in the United States, Denmark, the Malaysia/Thailand Joint Development Area (JDA), Malaysia and Norway. The Bakken Midstream segment provides fee-based services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and NGLs, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota.

FINANCIAL RATIOS  of  Hess Corporation (HES)

Valuation Ratios
P/E Ratio -3.2
Price to Sales 4
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 24.4
Price to Free Cash Flow -13.3
Growth Rates
Sales Growth Rate -25.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -47.9%
Cap. Spend. - 3 Yr. Gr. Rate -17.2%
Financial Strength
Quick Ratio 24
Current Ratio 0.1
LT Debt to Equity 46.1%
Total Debt to Equity 46.8%
Interest Coverage -10
Management Effectiveness
Return On Assets -17.8%
Ret/ On Assets - 3 Yr. Avg. -6.5%
Return On Total Capital -25.9%
Ret/ On T. Cap. - 3 Yr. Avg. -9.8%
Return On Equity -36.2%
Return On Equity - 3 Yr. Avg. -13.7%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 75.9%
Gross Margin - 3 Yr. Avg. 78.3%
EBITDA Margin -5.6%
EBITDA Margin - 3 Yr. Avg. 17.1%
Operating Margin -73.4%
Oper. Margin - 3 Yr. Avg. -38.7%
Pre-Tax Margin -79.9%
Pre-Tax Margin - 3 Yr. Avg. -40.8%
Net Profit Margin -127.2%
Net Profit Margin - 3 Yr. Avg. -50.8%
Effective Tax Rate -57.7%
Eff/ Tax Rate - 3 Yr. Avg. 1.1%
Payout Ratio -5.7%

HES stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HES stock intrinsic value calculation we used $6466 million for the last fiscal year's total revenue generated by Hess Corporation. The default revenue input number comes from 0001 income statement of Hess Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HES stock valuation model: a) initial revenue growth rate of 30.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.4%, whose default value for HES is calculated based on our internal credit rating of Hess Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Hess Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HES stock the variable cost ratio is equal to 201.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for HES stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.8% for Hess Corporation.

Corporate tax rate of 27% is the nominal tax rate for Hess Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HES stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HES are equal to 252.4%.

Life of production assets of 8.8 years is the average useful life of capital assets used in Hess Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HES is equal to -5.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9629 million for Hess Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 303.004 million for Hess Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Hess Corporation at the current share price and the inputted number of shares is $18.5 billion.

RELATED COMPANIES Price Int.Val. Rating
CVX Chevron Corpor 124.93 247.45  str.buy
BHP BHP Group Limi 56.60 102.39  str.buy
XOM Exxon Mobil Co 77.69 74.13  hold
MRO Marathon Oil C 14.05 64.13  str.buy
COP ConocoPhillips 60.33 7.04  str.sell
APC Anadarko Petro 70.31 1.43  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.