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Should Value Investors Buy Equinor (EQNR) Stock?

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Zacks Equity Research
·2 min read
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Equinor (EQNR) is a stock many investors are watching right now. EQNR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.46. This compares to its industry's average Forward P/E of 20.23. Over the past year, EQNR's Forward P/E has been as high as 34.99 and as low as 11.23, with a median of 16.58.

Finally, we should also recognize that EQNR has a P/CF ratio of 6.45. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.42. Within the past 12 months, EQNR's P/CF has been as high as 6.94 and as low as 2.64, with a median of 3.82.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Equinor is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EQNR feels like a great value stock at the moment.


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