GeoScience Enginee ing Vol. 70 (2024), No. 1
geoscience.cz pp. 67–77, ISSN 1802-5420
DOI 10.35180/gse-2024-0107
INTRINSIC VALUE OF STOCKS OF “BIG OIL” COMPANIES
Ma ek CHRASCINA 1 , Michal VANĚK 1 , Ka eřina PEKARČÍKOVÁ 1
1 VSB - Technical Uni e si y o Os a a, Facul y o Mining and Geology, Depa men o Economics
and Con ol Sys ems, Os a a, Czech Republic
Email: Ma ek.ch ascina.s @ sb.cz
ABSTRACT
This esea ch in es iga es he in insic alue o s ocks o companies wi hin he oil ex ac ion sec o . The ocus is
on publicly aded co po a ions pa o “Big Oil”: ExxonMobil Co po a ion, Che on Co po a ion, To alEne gies
SE, BP plc, Shell plc, and ENI S.p.A. The nume ous undamen al analysis in insic alue o s ocks models is being
applied o he Big Oil conso ium. This a icle s ands ou o i s unique ocus on u ilizing di idend discoun models,
ea nings models, and cash low models o calcula e he in insic alue o s ocks in majo oil companies, which is
cu en ly missing in exis ing s udies as o Ap il 2024. Th ough his app oach, i no only o ecas s s ock p ices bu
also p o ides in es men ecommenda ions, o e ing esh insigh s in o s ock e alua ion and unco e ing po en ial
in es men p ospec s wi hin hese companies acco ding o in insic alue o s ocks. Speci ic ma hema ical models
o he in insic alue o s ocks a e applied o each examined company o his calcula ion. The in insic alue o
s ocks in companies ecommended o in es men was ound o be unde alued by 7.25% o di idend discoun
models, 8.25% o ea nings models, and 36.75% o cash low models compa ed o hei cu en ma ke alues.
The assessmen o in insic alue o s ocks e eals he sui abili y o in es ing in hese companies: To alEne gies
SE, BP plc, Shell plc, ENI S.p.A. These esul s o e aluable insigh s o s ock in es o s in he oil sec o , as well
as o ganiza ions unde in es iga ion and o he s akeholde s in he oil ex ac ion indus y.
Key wo ds: Cash low models; Discoun models; Ea ning models; In insic alue; S ocks.
1 INTRODUCTION
As a commodi y wi h he bigges impac on he wo ld, c ude oil no only occupies a e y impo an p opo ion in
he global ade, bu also is closely ela ed o he poli ics and economy o all coun ies in he wo ld [1, 2, 3].
Oil se es as he p ima y ene gy sou ce o he global ma ke , cons i u ing 3% o global economy. I s consump ion
is closely ied o he le el o economic ac i i y. The in insic alue o s ocks p o es o be a sui able ool o a
comp ehensi e examina ion o his ma e [4].
The impo ance and ele ance o oil o he wo ld economy play a key ole in he way he oil indus y and
indi idual companies a e iewed. Lea ing aside he p ima y ole o oil companies, gi en hei impo ance, hese
companies can also be an in e es ing in es men oppo uni y.
An in es o 's decision o make a long- e m ( alue) in es men should be suppo ed by undamen al analysis.
Fundamen al analysis is one o he mos comp ehensi e me hods o compa ing he u u e p o i abili y o a s ock.
Fundamen al analysis is de ined as a me hod aimed a analysing cu en and pas inancial s a emen s in
conjunc ion wi h o he company speci ics. F om an in es o 's pe spec i e, we use undamen al analysis o he
s ock ma ke o look o he po en ial o make a p o i h ough unde alued o o e alued s ocks, which we can
hen u n in o p o i h ough he igh ading sys em. The aim is o ind he in insic (co ec ) alue o a s ock [1,
5].
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GeoScience Enginee ing Vol. 70 (2024), No. 1
geoscience.cz pp. 67–77, ISSN 1802-5420
DOI 10.35180/gse-2024-0107
This pape ocusses on undamen al analysis, speci ically on calcula ing he in insic alue o s ocks o companies
ha a e ha a e pa o he g oup “Big Oil”'. The g oup “Big Oil” consis s o ExxonMobil, Che on, To alEne gies,
BP, Shell, ENI.
Many heo is s and p ac i ione s ocus on he issue o in es ing. Many s udies ha e been conduc ed on he
heo e ical and empi ical aspec s o alua ion and s ock analysis.
Au ho s o scien i ic publica ions commonly w i e abou he a emp o each be e s ock alua ion models using
he undamen al analysis app oach [6], o abou he in luence o s ocks' in insic alua ion on in es men decision
making [7] and o he heo e ical aspec s o undamen al analysis, and why i is ad isable o ollow i o in es men
decision-making.
This a icle is dis inc i e in ha i ocuses on he p ac ical calcula ion o he in insic alue o s ocks in Big Oil
companies using di idend discoun models, ea nings models and cash low models. The e is no s udy cu en ly
a ailable as o Ap il 2024 applying hese o mulas o calcula ing he in insic alue o s ocks speci ically wi hin
he Big Oil’ g oup.
Howe e , we can obse e s udies dealing wi h he issue o oil p ices in ela ion o hei s ocks [8]. A simila
co ela ion is desc ibed by [9], which concluded ha i he p ice o oil ises, so does he p ice o company s ocks.
Au ho s [10] c ea ed s udy examining he impac s and in e ela ions among oil, s ock ma ke s, gold, and dolla s
based on global ma ke da a. They concluded ha oil p ices a e signi ican ly in luenced by s ock ma ke s, gold,
and he dolla , wi h indi ec e ec s, con i ming he exis ence o co ela ions wi hin he global ma ke .
Au ho s o s udy [11] di ec ly calcula e s ocks p ices p edic ion in he oil indus y using an LSTM model.
Abou in luencing in insic alue o s ocks on i s ma ke p ice we can ind s udy [12], whe e esul s show ha he
in insic alue conclusion has a signi ican posi i e e ec on s ock ma ke p ices p edic ion. O he s udies w i ing
abou p oblema ics o in insic alue and ele an in es men decision-making a e: In insic alue es ima es and
i s accu acy [13], In insic alue o cons uc ion s ocks: Empi ical e idence om he p ice ea ning models [14],
In insic alue in assessing he ai ness o i s s ock p ice using undamen al analysis [15].
Fi m analysis and i s in insic s ock alue p esen s i sel as an app op ia e me hod o p edic ing s ock p ices and
o e ing in es men ecommenda ions o po en ial in es o s, as esea ch wi h cu en da a has no ye been
conduc ed o “Big Oil”.
In he pas decade, oil companies ha e no done pa icula ly well compa ed o o he majo co po a ions, despi e
he ups and downs o ecen yea s. This is inc eased by he cu en global ocus on ansi ioning away om ossil
uels, which in oduces di icul ies and challenges in in es men decisions wi hin his indus y. Howe e , i is
no ewo hy ha oil companies ha e consis en ly epo ed signi ican p o i s, amoun ing o hund eds o billions o
dolla s. This p esen s an in e es ing esea ch p oblem, highligh ing a calcula ion o in insic alue o he oil
company s ocks.
The aim o he s udy is o calcula e in insic alue o s ocks using se e al o mulas o di idend discoun models,
ea nings models and cash low models applied on companies pa o “Big Oil”.
The selec ed companies a e majo playe s in he oil indus y, and he analysis seeks o p o ide insigh s in o hei
pe o mance and po en ial in es men oppo uni ies. Calcula ed in insic alue o he s ock is compa ed wi h he
ac ual ma ke alue, he eby de e mining whe he i is unde alued o o e alued. The conclusion sugges s
po en ial in es men oppo uni ies in oil company s ocks de e mined by hei in insic alue. Addi ionally, he
s udy examines how undamen al analysis iden i ies unde alued s ocks and minimises isks while maximizing
in es men po en ial in he dynamic landscape o he oil indus y.
These esea ch esul s p o ide insigh s o in es o s engaged in s ock ma ke s wi hin he oil sec o . Mo eo e ,
o ganiza ions unde in es iga ion, as well as o he in e es ed pa ies in he ealm o oil ex ac ion indus y, may
ind his s udy bene icial.
This s udy b ings new insigh s in o he e alua ion o in insic s ock alues and iden i ies in es men oppo uni ies
wi hin hese companies' s ocks. Speci ically, i ocuses on he applica ion o a ious models, such as di idend
discoun models, ea nings models, and cash low models, p o iding a comp ehensi e iew o s ock alue.
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GeoScience Enginee ing Vol. 70 (2024), No. 1
geoscience.cz pp. 67–77, ISSN 1802-5420
DOI 10.35180/gse-2024-0107
2 METHODOLOGY
Fundamen al analysis and i s in insic alue o s ocks, a e conside ed by he mos complex me hod o p edic ing
u u e s ock p ices, plays a key ole in he in es men p ocess. When applying undamen al analysis, i uses a ious
ma hema ical models o de e mine he in insic alue o a s ock, suppo ing in he iden i ica ion o u u e luc a i e
in es men s [16].
In insic alue, in pa icula , s i es o suppo he o ecas ing o long- e m ma ke ends. Typically applied o
p olonged in es men s, i p o ides insigh s in o de e mining he an icipa ed s ock p ices. Fu he mo e, i
s eamlines he iden i ica ion o p omising in es men oppo uni ies, pa icula ly in his case o selec ed oil
companies [17].
Acco ding o esea ch [18], which iden i ied a signi ican p e alence o undamen al analysis among in es o s,
wi h 75% ac i ely inco po a ing i in o hei s a egies. Reg ession analysis con i med a s a is ically signi ican
posi i e co ela ion be ween he applica ion o undamen al analysis and in es men success.
The companies subjec o s udy in his esea ch a e publicly aded co po a ions “Big Oil” desc ibing he wo ld's
six la ges and mos in luen ial publicly- aded oil and na u al gas p oduce s. The e m “Big Oil” encompasses
ExxonMobil, Che on, To alEne gies, BP, Shell, and ENI. This g oup aces i s o igins back o he his o ically
signi ican Se en Sis e s, which wielded con ol o e he majo i y o he wo ld's known oil ese es, consequen ly
domina ing he pe oleum ma ke du ing he mid-20 h cen u y. Following mul iple me ge s, he Se en Sis e s now
cons i u e ou o he six majo Big Oil companies, eme ging as some o he la ges en i ies globally. S a e-owned
coun e pa s o Big Oil include p ominen oil and gas p oduce s like Gazp om in Russia, Saudi A amco in Saudi
A abia, and Sinopec in China [19].
Big Oil ep esen s a sui able sample o in es men in o i ms ha a e he la ges in he oil indus y. Especially in
he Uni ed S a es, hei s ong economic in luence on poli ics s ands ou [19]. Addi ionally, he Uni ed S a es has
he la ges s ock exchange o ading s ocks (NYSE) [20]. Oil indus y s ocks se e as a good po olio di e si ie ,
i one o you in es men s loses alue, oil can s ill p o ide posi i e e u ns, se ing as a sou ce o passi e income
[21]. Mo eo e , acco ding o [22] published 7 h Feb ua y 2024, Big Oil companies a e dis ibu ing mo e money
o sha eholde s han e e be o e. Big Oil companies ha e a long-s anding adi ion in he dynamic oil sec o wi h
eliable inancial s a emen s, o e ing luc a i e in es men oppo uni ies.
The conclusion o co po a e undamen al analysis is based on he in insic alue o he s ocks. This a ea o
esea ch ocuses on calcula ing he in insic alue o he s ock acco ding o ele an li e a u e [23] and [24]. The
calcula ion was conduc ed based on he Di idend Discoun Models (DDM), Ea nings Models (EM), and Cash
Flow Models (CFM), which a e also ou lined in he in oduc ion chap e , wi h hei ela ionships desc ibed in
ables 1-3.
DDM o mulas a e he me hods ha a emp o calcula e he in insic alue o a s ock ega dless o p e ailing
ma ke condi ions, conside ing ac o s such as di idend payou s and expec ed ma ke e u ns. The models a e
based on he heo y ha he alue o a company is he p esen alue o he sum o all i s u u e di idend payou s
[23]. The heo y o EM in undamen al analysis ocuses on de e mining a company's in insic alue by analysing
i s u u e ea nings and cash lows. CFM ocuses on de e mining a company's in insic alue by analysing i s u u e
cash lows. This app oach assumes ha a s ock's alue is equal o he p esen alue o all expec ed u u e cash
lows, aking in o accoun ac o s such as g ow h po en ial and isk.
Calcula ing he s ock's in insic alue in ol es he ollowing o mulas:
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GeoScience Enginee ing Vol. 70 (2024), No. 1
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DOI 10.35180/gse-2024-0107
Table 1. Fo mulas – Di idend Discoun Models
Di idend discoun model wi h ze o
g ow h (1):
𝑉𝐻𝑎 = 𝐷0
𝑟𝑑
Single-s age di idend discoun
model wi h in ini e holding pe iod (2):
𝑉𝐻𝑎 = 𝐷0 ∗ (1 + 𝑔)
(1 + 𝑟𝑑)+𝐷0 ∗ (1 + 𝑔)2
(1 + 𝑟𝑑)2+ ⋯ . + 𝐷0 ∗ (1 + 𝑔)𝑛
(1 + 𝑟𝑑)𝑛
Go dons di idend discoun model (3):
𝑉𝐻𝑎 = 𝐷0 ∗ (1 + 𝑔)
(1 + 𝑟𝑑)
Sou ce: own p ocessing based on [23]
VHa - in insic alue o s ocks
D0 - discoun a e ( equi ed a e o e u n)
d - discoun a e ( equi ed cons an a e o e u n)
g - expec ed annual ea nings g ow h a e pe sha e [23]
Table 2. Fo mulas – Ea ning Models
Ze o g ow h ea ning model (4):
𝑉𝐻𝑎 = 𝐸0 ∗ 𝑉𝑃0
𝑟𝑑
Cons an g ow h ea ning model (5):
𝑉𝐻𝑎 = 𝐸1 ∗ 𝑉𝑃𝑓
(𝑟𝑑 − 𝑔)
Ea ning model ocused on inancial
me ics (6):
𝑉𝐻𝑎 = 𝑃𝐸 ∗(1 + 𝑟𝑑)∗𝑁𝑃
𝑁𝑆
Sou ce: own p ocessing based on [23]
VHa - in insic alue o s ocks
E0 - ne annual ea nings pe sha e in he ini ial yea
VP0 - di idend payou a io = D0 / E0
d - discoun a e ( equi ed cons an a e o e u n)
E1 - ne annual ea nings pe sha e in he u u e yea
VP - ixed di idend payou a io in indi idual yea s ( = = 0, 1, …n)
g - expec ed annual ea nings g ow h a e pe sha e
PE - p ice- o-ea nings a io
NP - ne p o i
NS – numbe o sha es issued [23]
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GeoScience Enginee ing Vol. 70 (2024), No. 1
geoscience.cz pp. 67–77, ISSN 1802-5420
DOI 10.35180/gse-2024-0107
Table 3. Fo mulas – Cash Flow Models
F ee cash low o equi y (FCFE) (7):
𝑉𝐻𝑎 =
𝐹𝐶𝐹𝐸1
𝑘 − 𝑔𝐹𝐶𝐹𝐸 +𝑅𝑑 ∗ 𝐷1 ∗ 𝑇
𝑟𝑏 − 𝐿
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 𝑖𝑠𝑠𝑢𝑒𝑑
Single s age model wi h cons an g ow h (8):
𝑉𝐻𝑎 =
𝐹𝐶𝐹𝐸1
𝐺𝐹𝐶𝐹𝐸 − 𝑘
𝑁𝑆
Sou ce: own p ocessing based on [24]
VHa - in insic alue o s ocks
L - o al liabili ies
Rd - in e es cos s on deb
D1 = L - o al liabili ies in he i s yea
T - Company ax a e
Rb - bo owing in e es a e
FCFE1 - expec ed ee cash low o equi y in he ollowing yea
k - equi ed a e o e u n
GFCFE - FCFE g ow h a e
NS – numbe o issued sha es [24]
By calcula ing indi idual o mulas, we ob ained he in insic alue o he s ock o each company and each
o mula. Subsequen ly, he a e age o he esul s o indi idual o mulas wi hin each a ea (DDM, EM, CFM) is
de e mined.
Resul a ea a e age o he (DDM, EM, CFM) o mula is compa ed wi h he cu en p ice o he company's sha es
as o Janua y 31, and he pe cen age di e ence be ween he in insic alue o he s ock and i s cu en p ice is
es ablished. I he esul is below 1.00, i indica es o e alua ion; con e sely, unde alua ion. The u he he esul
de ia es om he alue o 1.00 upwa ds, he mo e posi i e he esul .
The esul s o each g oup o o mulas, DDM, EM, CFM, a e a gued as o whe he he esul is posi i e o nega i e,
and why, along wi h subsequen explana ions o inpu alues such as he discoun a e. In es men
ecommenda ions a e made based on he weigh ed a e age o he indi idual a i hme ic a e ages o he esul s o
g oups o o mulas (DDM, EA, CFM), whe e CFM models a e assigned a weigh o 66.66%, as hey con ain one
less o mula om his g oup, whe eas he o he s con ain 3 models.
The esul o he weigh ed a e age is also compa ed wi h he cu en ma ke p ice o he sha es and he pe cen age
di e ence om his alue is de e mined, wi h he same signi icance as men ioned abo e.
The anking o oil companies, he subjec o po en ial in es men , is compiled based on he esul o he weigh ed
a e age o all g oups o o mulas and hei pe cen age di e ence, whe e he highes alue signi ies he mos
posi i e in es men oppo uni y. I he in insic alue o he s ock is unde alued, hen i is ecommended o in es .
The esul ing anking o companies based on he in insic alue o s ocks also se es as a compa ison among he
companies.
The da a o calcula ing he in insic alue o he s ock was ob ained om publicly a ailable sou ces, speci ically
om he inancial epo s sec ion and in es o ela ions in o ma ion on he websi es o he acked companies and
[25], [26], [27], cu en o 31.12.2023. These da a encompassed in o ma ion such as he cu en s ock p ice,
di idend yield, EBITDA o he las 12 mon hs, ne income, numbe o ou s anding sha es, deb le el, and cash
low. All he men ioned me ics we e exp essed in dolla s as his cu ency is ypically aded on he ma ke s whe e
hese companies a e aded.

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DOI 10.35180/gse-2024-0107
3 RESULTS AND DISCUSSION
Table 4. Calcula ion o he in insic alue o s ocks using Di idend Discoun Models (DDM)
Company
S ock p ice
31.1.2024
(USD)
DDM wi h
ze o g ow h
(USD)
S-S DDM wi h
in ini e holding
pe iod (USD)
Go dons DDM
(USD)
DDM
a e age
(USD)
Di e ence
(%)
ExxonMobil
102,81
74,40
103,88
96,72
91,67
0,85
Che on
147,43
123,20
152,22
160,16
145,19
0,94
To alEne gies
65,18
64,36
69,25
83,66
72,42
1,06
BP
35,1
34,10
37,18
44,34
38,54
1,05
Shell
62,91
51,74
64,79
67,26
61,26
0,93
ENI
31,94
38,90
35,39
50,57
41,62
1,25
Sou ce: own p ocessing based on DDM o mulas esul s
Acco ding o s udy [28] di idend models p o ide a sys ema ic and analy ical app oach o e alua ing s ock alue
and enable in es o s o make a ional decisions based on es ima ed in insic alue compa ed o ma ke p ice. Table
4 illus a es he in insic alue o s ocks calcula ed using he di idend discoun models. To compu e, we equi e
he an icipa ed yield a e, a he commencemen o he in es men , ypically conside ed ealis ic and sa is ac o y
a 10%, as employed du ing calcula ion he e [29]. The expec ed annual s ock p o i a e in he DDM calcula ion
is se o exceed he p edic ed in la ion in ele an zones such as EU [30] and USA [49] o he subsequen yea ,
based on companies' s ock g ow h s a is ics [31], namely 5.5%.
By a e aging he di idend discoun models (Table 4), and compa ing hem wi h he cu en s ock p ices, he mos
unde alued s ocks a e obse ed in ENI, wi h a de ia ion o 25%. To alEne gies and BP also ha e unde alued
s ocks, bu hei DDM a e ages signi ican ly less han ENI a 6% and 5%, espec i ely. ExxonMobil, Che on,
and Shell ha e s ocks o e alued acco ding o he DDM o mulas a e ages, wi h ExxonMobil showing he highes
o e alua ion a 15%.
Di idend Discoun Models, in hei calcula ion, a e p ima ily in luenced by he le el o di idends o indi idual
companies, hus he di idend policy o a company impac s he esul , depending on sha eholde s' p e e ences,
which alls wi hin he pu iew o he gene al mee ing. Companies like ExxonMobil, Shell and Che on ha e he
highes p ice- o-di idend a io, meaning he di idend yield pe in es ed dolla is lowes o hem, a ec ing he
ou comes o hese models and indica ing ha hese s ocks a e o e alued.
The indings indica e ha DDM p o ide a aluable me hod o assessing s ock alue by compa ing in insic alues
o cu en ma ke p ices. The analysis e eals ha ENI s ocks a e signi ican ly unde alued by 25%, while
To alEne gies and BP show less unde alua ion, and ExxonMobil, Che on, and Shell a e o e alued, highligh ing
po en ial in es men oppo uni ies and isks.
Table 5. Calcula ion o he in insic alue o a s ock using Ea ning Models (EM
Company
S ock p ice
31.1.2024
(USD)
Ze o g ow h
ea ning model
(USD)
Cons an
g ow h
ea ning model
(USD)
ea ning model
ocused on
inancial
me ics (USD)
EM
a e age
(USD)
Di e ence
(%)
ExxonMobil
102,81
74,4
87,21
113,09
97,77
0,89
Che on
147,43
123,2
144,42
162,17
153,53
0,97
To alEne gies
65,18
64,36
75,44
71,70
75,86
1,08
BP
35,1
34,10
39,98
38,61
40,41
1,07
Shell
62,91
51,74
60,65
69,20
64,84
0,96
ENI
31,94
38,90
45,60
31,94
42,05
1,22
Sou ce: own p ocessing based on EM o mulas esul s
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DOI 10.35180/gse-2024-0107
Table 5 p esen s he in insic alue o s ocks compu ed using he ea ning models. The yield a e is se in he same
manne as in he case o he DDM, as shown in Table 4, wi h he same a e o 10% also in he EM, and he equi ed
s ock yield also a 5.5% [29], which has simila a ionales o i s a angemen as illus a ed in Table 4. The esul s
o he ea ning models indica e a simila end o hose o he DDM, as shown in Table 4. By a e aging he h ee
ea ning models, we obse e ha ENI has he mos unde alued s ocks, his ime wi h an unde alua ion o 22%
compa ed o he cu en s ock p ice.
Table 5 shows ha To alEne gies and BP ha e s ocks mo e unde alued acco ding o he ea ning models compa ed
o he di idend discoun models, a 8% and 7%, espec i ely. Che on and Shell ha e s ocks p iced almos
accu a ely, wi h a 3% and 4% o e alua ion. ExxonMobil's s ocks a e clea ly o e alued, wi h i s s ocks using he
ea ning models calcula ion expec ed o be o e ed a 11% lowe han hei cu en p ice.
Ea ning models a e p ima ily in luenced by EBITDA12, numbe o issued s ocks and he le el o di idends, which
we ha e al eady add essed in he DDM. EBITDA12 is p ima ily a ec ed by de la ion in he economy, changes in
laws and egula ions, compe i i e p essu es om i als, mo emen s in ma ke p ices o goods and se ices, and
changes in consume p e e ences. Howe e , all companies a e in luenced by hese a iables. Ea ning models a e
linked o EBITDA12, he numbe o issued sha es, and he di idends. I undesi able ou comes a e achie ed, such
as in he cases o ExxonMobil, Che on, and Shell, he s ocks will be o e alued acco ding o he calcula ion o
hei in insic alue [32].
The ea nings models e eal inconsis encies in s ock alua ions, highligh ing he impo ance o using mul iple
me ics o a comp ehensi e analysis. In eg a ing hese me ics allows o mo e accu a e adjus men s and
e i ica ion o esul s, s eng hening he eliabili y o undamen al analysis in in es ing ield.
Table 6. Calcula ion o he in insic alue o a s ock using Cash Flow Models (CFM)
Company
S ock p ice
31.1.2024 (USD)
F ee cash low
o equi y
(USD)
Single s age model
wi h cons . g ow h
(USD)
CFM a e age
(USD)
Di e ence
(%)
ExxonMobil
102,81
74
106
90
0,88
Che on
147,43
67
108
87
0,59
To alEne gie
s
65,18
65
120
93
1,42
BP
35,1
26
79
52
1,49
Shell
62,91
68
119
94
1,49
ENI
31,94
13
55
34
1,07
Sou ce: own p ocessing based on CFM o mulas esul s
Table 6 p esen s he calcula ion o he in insic alue o he s ocks using wo di e en cash low models. Thei
a e age allows us o obse e he di e ence be ween he in insic alue o he s ocks and hei cu en s ock p ice.
The assumed annual cash low g ow h is de e mined based on he company's eal and his o ical da a a a a e o
2% [5]. The equi ed a e o e u n is se he same as in he p e ious in insic alue o s ock models a 10% [5].
Cash low models a e p ima ily in luenced by he size o F ee Cash Flow o Equi y (FCFE), which ep esen s he
cash a ailable o equi y in es o s a e accoun ing o all expenses, in es men s, and deb paymen s [34].
Compa ed o DDM (Table 4) and EM (Table 5), companies exhibi g ea e unde - o o e -p icing. O e 40%
unde alua ions in he in insic s ock p ice calcula ion ia he cash low model (Table 6) is obse ed in Shell, BP,
and To alEne gies, wi h 49%, 49%, and 42% espec i ely abo e he alue o hei cu en s ock p ices. The
opposi e ex eme is eached by Che on, whe e i s s ocks should heo e ically be o e ed 41% lowe i co ec ly
alued. Smalle di e ences in he calcula ion o he in insic s ock alue a e seen in ExxonMobil, which has
o e alued s ocks by 12%, and ENI, which has unde alued s ocks by 7%.
Cash low models o undamen al analysis depend on se e al key ac o s. These ac o s include he eliabili y o
inpu da a, he speci ic inancial me ics, and he economic and indus y con ex . The inpu da a a e d awn om
74
GeoScience Enginee ing Vol. 70 (2024), No. 1
geoscience.cz pp. 67–77, ISSN 1802-5420
DOI 10.35180/gse-2024-0107
31.1.2024. The speci ic inancial me ic mainly a ec ing his model is FCFE men ioned abo e. The economic and
indus y con ex e e s o some o he majo cash ese e companies in he wo ld wi hin he dynamic oil indus y
sec o .
Table 7. Summa y o in insic alue o s ocks
Company
S ock p ice
31.1.2024 (USD)
DDM
(USD)
EM
(USD)
CFM
(USD)
A e age (USD)
Di e ence
(%)
ExxonMobil
102,81
91,67
97,77
90
93,54
0,91
Che on
147,43
145,19
153,53
87
133,77
0,91
To alEne gies
65,18
72,42
75,86
93
78,85
1,21
BP
35,1
38,54
40,41
52
42,61
1,21
Shell
62,91
61,26
64,84
94
70,77
1,13
ENI
31,94
41,62
42,05
34
39,88
1,25
Sou ce: own p ocessing based on all o mulas esul s
Table 7 displays he calcula ion summa y o he in insic alue o s ocks o di idend discoun models, ea nings
models, and cash low models, using he me hodology desc ibed in de ail in he me hodology chap e .
Companies ENI, To alEne gies, BP, and Shell a e ound, based on esul s in Table 7, o ha e unde alued s ocks,
p esen ing luc a i e oppo uni ies o in es o s. Gi en hese indings and o he insigh s ega ding in insic s ock
alue e ealed by he s udy, hese companies a e deemed sui able o in es men oppo uni ies. Howe e , in es o s
should be mind ul o he associa ed isks and ecognizing ha undamen al analysis is ypically employed o long-
e m in es men s spanning ou yea s o mo e. ENI s ands ou wi h he mos -unde alued s ocks by 25%, closely
ollowed by To alEne gies and BP a 21% each, while Shell lags behind wi h a s ill posi i e bu lowe esul o
13% unde alua ion. On he o he hand, ExxonMobil and Che on ha e o e alued s ocks by 9% each, based on
hese o mulas ela i e o hei cu en s ock p ices, making hem un a ou able o in es men .
Table 7 shows ha he DDM and EM models yielded simila esul s o he selec ed companies, consis en ly
indica ing o e alued s ocks o some and unde alued s ocks o o he s. These models a e linked o simila
me ics such as di idend yield, EBITDA12, numbe o issued sha es, and cu en s ock p ice, among o he s.
Howe e , cash low models p o ided di e en insigh s, necessi a ing hei inclusion in he analysis. Cash low
models p ima ily ely on FCFE, which o Che on and ExxonMobil also shows less posi i e alues compa ed o
o he companies. Ne e heless, i is no ewo hy ha Shell, o example, exhibi ed sligh o e alua ion in DDM
and EM, ye cash low models indica ed signi ican unde alua ion o i s s ocks, making i a sui able in es men
op ion due o i s abo e-a e age FCFE pe o mance. ENI had he mos unde alued s ocks among all companies
in bo h DDM (Table 4) and EM (Table 5), bu no in CFM, and i s a e age esul s app oached hose o o he
ecommended in es men s. None heless, ENI's s ocks emain he mos unde alued o e all.
Figu e 1 p o ides a g aphical illus a ion o he compa ison be ween he in insic alue o s ocks and hei cu en
ma ke alue, hus explaining which companies a e ecommended o in es men based on unde alued s ocks, as
e ealed by his s udy.
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GeoScience Enginee ing Vol. 70 (2024), No. 1
geoscience.cz pp. 67–77, ISSN 1802-5420
DOI 10.35180/gse-2024-0107
Figu e 1. Compa ison o in insic alue o s ocks o i s s ocks p ice
Sou ce: own p ocessing based on a e age o in insic alue o s ocks esul s
4 CONCLUSION
Se e al s udies ha e explo ed heo e ical and empi ical aspec s o s ock alua ion and analysis, wi h esea che s
commonly e ining s ock alua ion models using undamen al analysis and emphasizing he signi icance o
in insic alua ion in in es men decision-making. In ligh o hese indings, his s udy success ully conduc ed a
p ac ical calcula ion o he in insic s ock alues o “Big Oil” using cu en da a, which was he p ima y objec i e
o he s udy.
This s udy's con ibu ion lies in i s p ac ical calcula ion o in insic s ock alues o p ominen “Big Oil”
companies. By o e ing a comp ehensi e summa y o in insic alue calcula ions h ough di idend discoun
models, ea nings models, and cash low models, he esea ch p o ides aluable insigh s o in es o s seeking
oppo uni ies in he oil sec o . Speci ically, he iden i ica ion o unde alued s ocks, such as ENI 25%,
To alEne gies 21%, BP 21%, and Shell 13%, p esen s luc a i e in es men p ospec s o indi iduals o en i ies
looking o capi alize on po en ial g ow h and a ou able alua ion me ics. Consequen ly, he s udy se es as a
aluable esou ce o in es o s, inancial analys s, and decision make s, helping hem o make in o med in es men
decisions based on undamen al analysis p inciples.
The ecommenda ions o s udy a e es ablished on basis on he p o essional li e a u e and p ac ical esul s o DDM,
EM and CFM. Fundamen al analysis i sel is no sui able o in es o s expec ing sho - e m gains bu a he o
in es o s a emp ing o es ima e u u e in es men p ospec s o e a longe ime ho izon. Po en ial in es men
should be conside ed by each in es o indi idually, and he s udy should be ega ded as a possible empla e o
hei decision-making.
ACKNOWLEDGEMENT
The au ho s would like o exp ess hei g a i ude o he S uden G and Compe i ion o he Facul y o Mining and
Geology VSB-TUO, No. SP2023/047, o hei encou agemen and inancial suppo .
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
USD
S ock p ice (31.1.2024)
In insic alue o s ock