Ecopetrol (BVC:ECOPETROL) - Share price, News & Analysis

Q: What is the Fair Price of ECOPETROL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ECOPETROL (COP2326) is trading below our estimate of [[fair value]] (COP3105.78)

ECOPETROL fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	4/6
Financial Health	3/6
Dividends	2/6

ECOPETROL Stock Overview

Ecopetrol S.A. operates as an integrated energy company.

Rewards

Trading at 25.1% below our estimate of its fair value

Earnings have grown 16% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of 69.7% per year for the next 3 years

Has a high level of debt

Dividend of 10.45% is not well covered by earnings

Volatile share price over the past 3 months

Ecopetrol Competitors

Oil and Natural Gas

NSEI:ONGC

₹1.8t

Imperial Oil

TSX:IMO

CA$37.5b

Repsol

BME:REP

€18.5b

OMV

WBAG:OMV

€13.4b

Price History & Performance

Summary of all time highs, changes and price drops for Ecopetrol
Historical stock prices
Current Share Price	Col$2,326.00
52 Week High	Col$3,660.00
52 Week Low	Col$2,005.00
Beta	1.23
1 Month Change	2.60%
3 Month Change	-25.02%
1 Year Change	-10.05%
3 Year Change	-15.42%
5 Year Change	69.78%
Change since IPO	14.86%

Shareholder Returns

	ECOPETROL	CO Oil and Gas	CO Market
7D	3.4%	-3.5%	1.6%
1Y	-10.1%	3.0%	-3.9%

Return vs Industry: ECOPETROL underperformed the CO Oil and Gas industry which returned 10.5% over the past year.

Return vs Market: ECOPETROL underperformed the CO Market which returned -3.8% over the past year.

Price Volatility

Is ECOPETROL's price volatile compared to industry and market?
ECOPETROL volatility
ECOPETROL Average Weekly Movement	9.1%
Oil and Gas Industry Average Movement	6.5%
Market Average Movement	6.4%
10% most volatile stocks in CO Market	9.3%
10% least volatile stocks in CO Market	4.0%

Stable Share Price: ECOPETROL is more volatile than 75% of CO stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: ECOPETROL's weekly volatility (9%) has been stable over the past year, but is still higher than 75% of CO stocks.

About the Company

Founded	Employees	CEO	Website
1948	18,000	Felipe Bayon Pardo	https://www.ecopetrol.com.co

Ecopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services.

Ecopetrol Fundamentals Summary

How do Ecopetrol's earnings and revenue compare to its market cap?
ECOPETROL fundamental statistics
Market Cap	Col$95.64t
Earnings (TTM)	Col$25.88t
Revenue (TTM)	Col$131.59t

3.7x

P/E Ratio

0.7x

P/S Ratio

Is ECOPETROL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ECOPETROL income statement (TTM)
Revenue	Col$131.59t
Cost of Revenue	Col$73.01t
Gross Profit	Col$58.58t
Other Expenses	Col$32.69t
Earnings	Col$25.88t

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	629.48
Gross Margin	44.52%
Net Profit Margin	19.67%
Debt/Equity Ratio	104.3%

How did ECOPETROL perform over the long term?

See historical performance and comparison

Dividends

10.4%

Current Dividend Yield

39%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ECOPETROL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ECOPETROL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ECOPETROL. This is calculated by dividing ECOPETROL's market cap by their current preferred multiple.
What is ECOPETROL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	Col$95.64t

ECOPETROL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	3.4x
PEG Ratio	-0.05x

Price to Earnings Ratio vs Peers

How does ECOPETROL's PE Ratio compare to its peers?

ECOPETROL PE Ratio vs Peers

The above table shows the PE ratio for ECOPETROL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	5x
ONGC Oil and Natural Gas	3.8x	-0.8%	₹1.8t
IMO Imperial Oil	7.1x	-11.3%	CA$37.5b
REP Repsol	4.9x	-13.4%	€18.5b
OMV OMV	4.1x	-18.4%	€13.4b
ECOPETROL Ecopetrol	3.7x	-69.7%	Col$95.6t

Price-To-Earnings vs Peers: ECOPETROL is good value based on its Price-To-Earnings Ratio (3.7x) compared to the peer average (5x).

Price to Earnings Ratio vs Industry

How does ECOPETROL's PE Ratio compare vs other companies in the Global Oil and Gas Industry?

Price-To-Earnings vs Industry: ECOPETROL is good value based on its Price-To-Earnings Ratio (3.7x) compared to the South American Oil and Gas industry average (6.3x)

Price to Earnings Ratio vs Fair Ratio

What is ECOPETROL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ECOPETROL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.7x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate ECOPETROL's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of ECOPETROL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ECOPETROL (COP2326) is trading below our estimate of fair value (COP3105.78)

Significantly Below Fair Value: ECOPETROL is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Ecopetrol forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-69.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECOPETROL's earnings are forecast to decline over the next 3 years (-69.7% per year).

Earnings vs Market: ECOPETROL's earnings are forecast to decline over the next 3 years (-69.7% per year).

High Growth Earnings: ECOPETROL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ECOPETROL's revenue is expected to decline over the next 3 years (-9.8% per year).

High Growth Revenue: ECOPETROL's revenue is forecast to decline over the next 3 years (-9.8% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ECOPETROL's Return on Equity is forecast to be high in 3 years time (24.8%)

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Past Performance

How has Ecopetrol performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ECOPETROL has high quality earnings.

Growing Profit Margin: ECOPETROL's current net profit margins (19.7%) are higher than last year (13%).

Past Earnings Growth Analysis

Earnings Trend: ECOPETROL's earnings have grown by 16% per year over the past 5 years.

Accelerating Growth: ECOPETROL's earnings growth over the past year (214.1%) exceeds its 5-year average (16% per year).

Earnings vs Industry: ECOPETROL earnings growth over the past year (214.1%) underperformed the Oil and Gas industry 236.2%.

Return on Equity

High ROE: Whilst ECOPETROL's Return on Equity (30.74%) is high, this metric is skewed due to their high level of debt.

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Financial Health

How is Ecopetrol's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ECOPETROL's short term assets (COP61,010.0B) exceed its short term liabilities (COP41,752.0B).

Long Term Liabilities: ECOPETROL's short term assets (COP61,010.0B) do not cover its long term liabilities (COP126,448.0B).

Debt to Equity History and Analysis

Debt Level: ECOPETROL's net debt to equity ratio (92.4%) is considered high.

Reducing Debt: ECOPETROL's debt to equity ratio has increased from 98.1% to 104.3% over the past 5 years.

Debt Coverage: ECOPETROL's debt is well covered by operating cash flow (26.6%).

Interest Coverage: ECOPETROL's interest payments on its debt are well covered by EBIT (13.1x coverage).

Balance Sheet

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Dividend

What is Ecopetrol current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

10.45%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ECOPETROL's dividend (10.45%) is higher than the bottom 25% of dividend payers in the CO market (3.55%).

High Dividend: ECOPETROL's dividend (10.45%) is low compared to the top 25% of dividend payers in the CO market (11.8%).

Stability and Growth of Payments

Stable Dividend: ECOPETROL's dividend payments have been volatile in the past 10 years.

Growing Dividend: ECOPETROL's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.6%), ECOPETROL's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (98.1%), ECOPETROL's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure

CEO

Felipe Bayon Pardo (56 yo)

4.92yrs

Tenure

Mr. Felipe Bayon Pardo has been the Chief Executive Officer of Ecopetrol SA since September 15, 2017 and served as its Executive Vice President and Chief Operating Officer from February 15, 2016 to Septemb...

Leadership Team

Experienced Management: ECOPETROL's management team is seasoned and experienced (5.1 years average tenure).

Board Members

Experienced Board: ECOPETROL's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31