Oil & Gas Exploration & Production · NYSE
Current Price
$28.55
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Marathon Oil Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Marathon Oil Corporation operates as an independent exploration and production company in the United States and internationally. The company engages in the exploration, production, and marketing of crude oil and condensate, natural gas liquids, and natural gas; and the production and marketing of products manufactured from natural gas, such as liquefied natural gas and methanol. It also owns and operates 32 central gathering and treating facilities; and the Sugarloaf gathering system, a 42-mile natural gas pipeline through Karnes and Atascosa Counties. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in December 2001. Marathon Oil Corporation was founded in 1887 and is headquartered in Houston, Texas.
ROIC (TTM)
10.3%
ROE (TTM)
13.8%
FCF Yield
12.86%
Based on trailing twelve-month data, MRO shows a free cash flow per share of N/A and a ROIC of 10.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 12.86% are important context metrics when evaluating MRO's stock valuation relative to peers.
The intrinsic value of MRO 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 MRO is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $28.55. 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 Marathon Oil 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 MRO'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 Marathon Oil 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. MRO's ROIC of 10.3% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MRO, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
