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Are Investors Undervaluing Equinor (EQNR) Right Now?

Zacks

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the “Value” category. When paired with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Equinor (EQNR). EQNR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.92, which compares to its industry’s average of 11.23. Over the past year, EQNR’s Forward P/E has been as high as 20.63 and as low as 9.36, with a median of 15.06.


We also note that EQNR holds a PEG ratio of 0.45. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. EQNR’s industry currently sports an average PEG of 0.53. Over the past 52 weeks, EQNR’s PEG has been as high as 1.12 and as low as 0.42, with a median of 0.76.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. EQNR has a P/S ratio of 1.05. This compares to its industry’s average P/S of 2.3.

These are only a few of the key metrics included in Equinor’s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, EQNR looks like an impressive value stock at the moment.


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