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Is Equinor (EQNR) Stock Undervalued Right Now?

Published 11/15/2018, 09:10 PM
Updated 07/09/2023, 06:31 AM

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 company to watch right now is Equinor (EQNR). EQNR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.51 right now. For comparison, its industry sports an average P/E of 10.79. EQNR's Forward P/E has been as high as 20.72 and as low as 9.36, with a median of 15.24, all within the past year.

EQNR is also sporting a PEG ratio of 0.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EQNR's PEG compares to its industry's average PEG of 0.51. Over the last 12 months, 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 use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EQNR has a P/S ratio of 1.1. This compares to its industry's average P/S of 2.92.

Value investors will likely look at more than just these metrics, but the above data helps show that Equinor is likely undervalued currently. And when considering the strength of its earnings outlook, EQNR sticks out at as one of the market's strongest value stocks.



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