National Oilwell Varco designs, manufactures, and sells equipment and components used in oil and gas drilling, completion, and production; and provides oilfield services to the upstream oil and gas industry worldwide. The company was founded in 1862 and is based in Houston, Texas.
NOV Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for National Oilwell Varco Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that National Oilwell Varco Inc ranked in the 9th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 93%. As for the metrics that stood out in our discounted cash flow analysis of National Oilwell Varco Inc, consider:
The company's compound free cash flow growth rate over the past 5.78 years comes in at -0.26%; that's greater than just 7.11% of US stocks we're applying DCF forecasting to.
National Oilwell Varco Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -63.64. This coverage rate is greater than that of just 2.58% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 11. This value is greater than 73.55% stocks in the Energy sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of National Oilwell Varco Inc? See CCLP, PSX, TTI, CPG, and MRO.