Last Update 22 Feb 26

Fair value Decreased 0.99%

EQNR: Renewables Execution And Margin Pressures Will Likely Restrain Future Capital Returns

Narrative Update on Equinor

Our updated analyst price target for Equinor edges down from NOK 240.28 to NOK 237.91, reflecting a slightly lower fair value and profit margin outlook as analysts weigh mixed recent rating actions. These include upgrades at some firms, alongside a lower NOK 214 target and Underweight stance from Morgan Stanley, and a Hold rating with a NOK 220 target from Jefferies.

Analyst Commentary

Recent research on Equinor gives you a mixed but useful picture, with some analysts turning more positive while others stay cautious on valuation and downside risks.

Bullish Takeaways

Bullish analysts upgrading Equinor point to a more constructive view on the company’s ability to execute on its current portfolio. They see this as supportive of the revised fair value range.
They view the recent upgrades as a signal that, at current levels, the risk and reward trade off looks more balanced, with room for value if the company delivers in line with expectations.
Supportive ratings suggest confidence that Equinor can maintain operational discipline. These analysts see this as key to justifying the upper end of valuation targets.
Some bullish views interpret the cluster of Hold and Underweight calls as already reflecting many of the known risks. They see this as limiting further downside baked into current pricing.

Bearish Takeaways

Bearish analysts lowering price targets toward NOK 214 highlight valuation concerns. They indicate they see less upside relative to prior expectations.
Underweight and Hold stances signal caution around execution risks and profit margins, which they view as constraints on Equinor’s ability to justify higher targets.
The presence of a Hold rating with a NOK 220 target suggests that some analysts see the shares as fairly valued, with limited room for outperformance if conditions remain unchanged.
The mix of upgrades and downgrades points to uncertainty around the company’s earnings power, which keeps more conservative analysts wary of paying a premium for the stock.

What's in the News

Judge allows Equinor to resume a U.S. wind project after a legal challenge, removing a near term hurdle for its offshore wind activities (Bloomberg).
Equinor and Eneco sign a 5 year gas supply agreement of up to 0.5 bcm per year to the Dutch grid. The gas is described as having a lower than average greenhouse gas footprint, with associated sustainability guarantees transferred via the Attributes SAS platform.
The Board of Directors authorizes a share buyback plan effective in 2026, alongside a repurchase program of up to US$1,500m in shares that are intended to be cancelled, including shares to be redeemed from the Norwegian state.
Equinor provides 2026 production guidance, indicating expected oil and gas production around 3% above the 2025 level.
For Q4 2025, Equinor reports total equity production of 2,198 mboe per day versus 2,072 mboe per day in the same quarter a year earlier. For full year 2025, the company reports total equity production of 2,137 mboe per day and power generation of 5.65 TWh.

Valuation Changes

Fair Value: NOK 237.91, edging down slightly from NOK 240.28, indicating a small trim to the central valuation estimate.
Discount Rate: 6.54%, essentially unchanged from 6.55%, so the required return assumption is stable.
Revenue Growth: 1.29% annual decline now assumed versus a 1.29% annual decline previously, reflecting a very small adjustment to the top line outlook.
Net Profit Margin: 6.77%, down modestly from 6.81%, pointing to a slightly more conservative view on profitability.
Future P/E: 8.85x, up a touch from 8.75x, implying a marginally higher multiple being used for future earnings in the model.

Equinor faces overvaluation risk due to optimistic assumptions around both oil & gas demand and rapid, profitable renewables growth amid regulatory and margin pressures.
High returns and shareholder payouts may be unsustainable, as legacy assets mature, capex needs rise, and tightening ESG regulations limit growth and investment capacity.
Large-scale project execution, long-term gas contracts, U.S. gas expansion, disciplined financial management, and investment in renewables drive stable returns and future growth resilience.

Catalysts

About Equinor

An energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally.What are the underlying business or industry changes driving this perspective?

Persistent market optimism appears to be pricing in continued strong demand for Equinor's oil and gas production due to energy security concerns in Europe, as evidenced by new long-term gas supply contracts to the UK and Germany. However, should policy support for decarbonization accelerate or renewables adoption outpace forecasts, future revenues from upstream output may be pressured, leading to overvaluation risk.
Expectations are high for Equinor's rapid expansion and value creation in renewables, especially offshore wind. Yet, recent impairments on U.S. wind projects highlight regulatory and margin headwinds, indicating that future earnings and net margins from renewables may not offset waning oil & gas cash flows as quickly as the market currently anticipates.
Investors may be overestimating the durability of Equinor's strong net margins and cash flows from the Norwegian Continental Shelf, despite maturing fields, elevated operating costs, and short-term production gains from projects coming online. Risks of structural decline in these legacy assets could weigh on long-term earnings.
Current valuations reflect assumptions of sustained or increasing shareholder returns (dividends and buybacks), but high capital distribution may become harder to maintain if energy prices soften, FX movements turn adverse, or capex needs for transition projects increase, pressuring future EPS and total shareholder yield.
The market may be underappreciating the impact of tightening global ESG regulations and capital allocation shifts away from oil and gas, which could result in a higher cost of capital and reduced access to equity markets for Equinor, ultimately constraining investment capacity and future growth.

Equinor Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Equinor's revenue will decrease by 5.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 7.7% today to 8.4% in 3 years time.
Analysts expect earnings to reach $7.6 billion (and earnings per share of $2.82) by about September 2028, down from $8.2 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $8.6 billion in earnings, and the most bearish expecting $6.0 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.0x on those 2028 earnings, up from 7.4x today. This future PE is greater than the current PE for the GB Oil and Gas industry at 8.4x.
Analysts expect the number of shares outstanding to decline by 5.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.95%, as per the Simply Wall St company report.

Equinor Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Rapid and efficient ramp-up of major projects such as Johan Castberg to plateau production, combined with ongoing high regularity and incremental investments in key fields like Johan Sverdrup, support sustained or growing upstream production and drive potential revenue and earnings stability through 2035.
Securing long-term gas supply contracts with the UK and Germany, which reflect continued European demand and regulatory support for energy security, provides stability and visibility for future cash flows and mitigates the risk of declining revenues in the gas segment.
Accelerated expansion in U.S. onshore gas production (e.g., Marcellus acquisitions) leverages higher gas prices and positions Equinor to benefit from long-term global energy trends (data center and AI-driven demand), supporting net margin growth and cash flow enhancement.
Robust balance sheet management, flat cost development, and active capital allocation (including regular dividends and share buybacks) create the financial flexibility to sustain shareholder returns and support earnings per share even in volatile market environments.
Strategic diversification into offshore wind and renewables, underpinned by project financing at favorable terms and double-digit expected equity returns, establishes new revenue streams and enhances long-term margin resilience as secular trends favor decarbonization and renewables adoption.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of NOK258.164 for Equinor based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK320.92, and the most bearish reporting a price target of just NOK179.69.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $90.2 billion, earnings will come to $7.6 billion, and it would be trading on a PE ratio of 9.0x, assuming you use a discount rate of 7.0%.
Given the current share price of NOK241.2, the analyst price target of NOK258.16 is 6.6% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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