Oil & Gas Exploration & Production · NYSE
Current Price
$148.97
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Hess Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Hess Corporation, an exploration and production company, explores, develops, produces, purchases, transports, and sells crude oil, natural gas liquids (NGLs), and natural gas. The company operates in two segments, Exploration and Production, and Midstream. It conducts production operations primarily in the United States, Guyana, the Malaysia/Thailand Joint Development Area, and Malaysia; and exploration activities principally offshore Guyana, the U.S. Gulf of Mexico, and offshore Suriname and Canada. The company is also involved in gathering, compressing, and processing natural gas; fractionating NGLs; gathering, terminaling, loading, and transporting crude oil and NGL through rail car; and storing and terminaling propane, as well as providing water handling services primarily in the Bakken Shale plays in the Williston Basin area of North Dakota. As of December 31, 2021, it had total proved reserves of 1,309 million barrels of oil equivalent. The company was incorporated in 1920 and is headquartered in New York, New York.
ROIC (TTM)
6.8%
ROE (TTM)
8.5%
FCF Yield
-0.12%
Based on trailing twelve-month data, HES shows a free cash flow per share of N/A and a ROIC of 6.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of -0.12% are important context metrics when evaluating HES's stock valuation relative to peers.
The intrinsic value of HES depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether HES is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $148.97. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Hess Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Exploration & Production industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting HES's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Hess Corporation, this means projecting how much free cash flow the Oil & Gas Exploration & Production will produce over the next 5-10 years, then discounting those amounts to today's dollars. HES's ROIC of 6.8% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For HES, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
