As part of our ongoing series here at The Acquirer’s Multiple, each week we focus on one of the stocks from our Stock Screeners, and why it might be a deeply undervalued gem.

The stock this week is:

Equinor ASA (EQNR)

Equinor is a Norwegian multinational energy company engaged in oil and gas exploration, development, and renewable energy solutions. Formerly known as Statoil, the company has evolved into a broad energy provider with operations spanning Europe, North and South America, and Africa. Backed by significant offshore expertise and one of the world’s largest sovereign wealth funds, Equinor is strategically positioned to benefit from both traditional energy markets and the global transition to renewables.

One of the metrics we use in our screens is IV/P (Intrinsic Value to Price). Let us simplify what it means:

What is IV/P (Intrinsic Value to Price)?

IV/P tells you if a stock is a good deal based on how much value you’re getting for the price you pay.

The Calculation:

It combines a stock’s earning power, growth potential, and what it’s returning to shareholders (via dividends and buybacks) to calculate its Implied Value — what the business is worth based on its fundamentals.

The Interpretation:

• IV/P > 1: You’re getting more value than you’re paying for — a potential bargain.
• IV/P < 1: You’re paying more than the business is worth — possibly overvalued.

If IV/P is very high, it signals the stock might be trading at a deep discount.

IV/P for Equinor: 5.20

Equinor currently has an IV/P of 5.20, meaning the stock’s implied value is calculated to be 5.2 times greater than its current price. Put another way:

For every $1 you invest, you’re potentially getting $5.20 of value.

That’s an exceptionally high margin of safety, suggesting Equinor may be significantly undervalued.

Supporting Metrics:

• Shareholder Yield: 24.27%
  This includes dividends and buybacks — a remarkably high return of capital to shareholders.
• Free Cash Flow Yield: 13.20%
  Indicates strong cash generation relative to market cap, a positive sign for long-term profitability and resilience.

Why Might Equinor Be Undervalued?

1. Energy Market Volatility:
Despite strong fundamentals, energy stocks often trade at discounts during periods of oil price instability or shifting demand forecasts, especially as markets weigh the pace of the energy transition.

2. European Exposure:
As a European energy company, Equinor may be overlooked by U.S.-focused investors, or perceived as more exposed to regulatory pressure around fossil fuels — even though it’s actively investing in wind, solar, and carbon capture.

3. Conservative Investor Perception:
Some investors may not fully appreciate Equinor’s balance of traditional and renewable energy investments, leading to underappreciation of its long-term strategy and diversified revenue base.

Conclusion:

With an IV/P of 5.20, Equinor (EQNR) appears to be trading at a significant discount to its intrinsic value. Its combination of strong cash flow generation, extremely high shareholder returns, and global energy exposure makes it an appealing opportunity for deep value investors. While near-term energy market swings may impact sentiment, Equinor’s operational strength and strategic positioning suggest meaningful upside if the market begins to recognize its true worth.

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