Equinor share: Explosive development

Last Updated: 4. Januar 2024By

What a news from the USA: BP and Equinor terminate the offshore wind energy contract in the state of New York, according to ticker messages this morning. Are the companies now withdrawing from wind energy? No: BP and Equinor, as I have written to you before, are not satisfied with the conditions and developments on site. Equinor receives – unsolicited – my approval.

Equinor remains attractive In any case, from my point of view, the Norwegians are well positioned. The new year has begun, but the old year has not yet been settled. You can assume that the sales targets will be achieved. Good $100 billion are expected to be on the books. The net result will probably – as always, this can only be estimated – amount to around $12 billion.

With a current market value of just over $93 billion, the P/E ratio will thus be 7.9. This is completely acceptable, or even cheap. The company is highly profitable, which means that a cheap valuation is not even necessary in the end. According to estimates, the dividend yield for the past year was around 10% – which you as a shareholder would still receive.

The outlook for the coming year and the next few years is unlikely to be worse than what we can already assume. If the net results decrease slightly – nobody can say exactly how energy prices will develop – you can still expect a P/E ratio of around 8.

This is attractive in the long term For those who prefer to focus on the price-to-sales ratio (P/S), there is also a very attractive valuation: For the past year, it is certainly less than 0.8 and for the current year, it may be slightly above 0.8. The sales, which are already profitable, are therefore not being paid for expensively.

In my view, the risks also remain comparatively low. Equinor not only benefits from Norway’s natural resources, but also looks to the future. For example, there are agreements with the German industry to store CO2 in the long term off the coast of Norway. Equinor is investing worldwide (also) in alternative energy sources.

Therefore, the stock is certainly boring in the eyes of traders, there are no spectacular, unknown activities. From my point of view, the calmness and composure with which the dividends can be welcomed on the account euro by euro is interesting. Equinor will accompany us all in the long term.

Equinor: Strong also in 2024 – WKN: 675213 – ISIN: NO0010096985

Source: https://fundamental.aktienscreener.com/DE000ENER6Y0/EI/siemens-energy-ag/data

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