Serica Energy plc

AIM:SQZ Stock Report

Market Cap: UK£554.0m

Serica Energy Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

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

Below Fair Value: SQZ (£1.42) is trading below our estimate of fair value (£4.68)

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

Key Valuation Metric

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

Key metric: As SQZ is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for SQZ. This is calculated by dividing SQZ's market cap by their current earnings.
What is SQZ's PE Ratio?
PE Ratio6.1x
EarningsUS$114.14m
Market CapUS$694.21m

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for SQZ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average16.2x
DEC Diversified Energy
5.7x1.1%UK£652.0m
TLW Tullow Oil
25.9x18.8%UK£336.3m
SEPL Seplat Energy
19.5x13.4%UK£1.3b
ENQ EnQuest
13.6x-3.6%UK£224.7m
SQZ Serica Energy
6.1x-15.0%UK£554.0m

Price-To-Earnings vs Peers: SQZ is good value based on its Price-To-Earnings Ratio (6.1x) compared to the peer average (16.2x).

Price to Earnings Ratio vs Industry

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

2 CompaniesPrice / EarningsEstimated GrowthMarket Cap
ROSN Rosneft Oil
1.5xn/aUS$21.03b
INDI Indus Gas
0.9xn/aUS$17.25m
No more companies available in this PE range
SQZ 6.1xIndustry Avg. 8.9xNo. of Companies5PE0612182430+
2 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: SQZ is good value based on its Price-To-Earnings Ratio (6.1x) compared to the UK Oil and Gas industry average (8.9x).

Price to Earnings Ratio vs Fair Ratio

What is SQZ'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.

SQZ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio6.1x
Fair PE Ratio8.5x

Price-To-Earnings vs Fair Ratio: SQZ is good value based on its Price-To-Earnings Ratio (6.1x) compared to the estimated Fair Price-To-Earnings Ratio (8.5x).

Analyst Price Targets

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

The above table shows the analyst SQZ forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£1.42
UK£2.46
+73.1%
21.2%UK£3.00UK£1.70n/a4
Nov ’25UK£1.35
UK£2.47
+82.7%
21.3%UK£3.01UK£1.71n/a4
Oct ’25UK£1.35
UK£2.48
+83.2%
19.1%UK£2.95UK£1.70n/a5
Sep ’25UK£1.27
UK£2.71
+113.7%
14.9%UK£3.29UK£2.21n/a5
Aug ’25UK£1.28
UK£2.71
+111.9%
14.9%UK£3.29UK£2.21n/a5
Jul ’25UK£1.35
UK£2.74
+103.9%
14.8%UK£3.34UK£2.25n/a5
Jun ’25UK£1.75
UK£2.90
+65.3%
14.4%UK£3.34UK£2.24n/a4
May ’25UK£1.81
UK£3.03
+68.1%
12.0%UK£3.47UK£2.57n/a3
Apr ’25UK£1.89
UK£3.20
+69.6%
12.9%UK£3.67UK£2.59n/a4
Mar ’25UK£1.77
UK£3.12
+76.0%
11.0%UK£3.69UK£2.77n/a4
Feb ’25UK£2.06
UK£3.30
+60.4%
9.9%UK£3.65UK£2.79n/a4
Jan ’25UK£2.30
UK£3.44
+50.0%
4.8%UK£3.68UK£3.28n/a4
Dec ’24UK£2.26
UK£3.63
+60.8%
11.9%UK£4.31UK£3.26n/a4
Nov ’24UK£2.30
UK£3.35
+45.5%
3.8%UK£3.54UK£3.19UK£1.354
Oct ’24UK£2.49
UK£3.38
+36.0%
11.1%UK£3.96UK£2.94UK£1.354
Sep ’24UK£2.52
UK£3.36
+33.4%
9.4%UK£3.83UK£2.92UK£1.275
Aug ’24UK£2.37
UK£3.36
+41.5%
9.6%UK£3.80UK£2.89UK£1.285
Jul ’24UK£2.10
UK£3.42
+62.6%
8.4%UK£3.85UK£3.13UK£1.354
Jun ’24UK£2.17
UK£3.74
+72.1%
8.7%UK£4.11UK£3.24UK£1.754
May ’24UK£2.38
UK£3.74
+57.2%
8.7%UK£4.11UK£3.24UK£1.814
Apr ’24UK£2.22
UK£3.95
+78.4%
8.0%UK£4.36UK£3.59UK£1.893
Mar ’24UK£2.55
UK£3.95
+54.9%
8.0%UK£4.36UK£3.59UK£1.773
Feb ’24UK£2.53
UK£4.07
+60.7%
8.0%UK£4.37UK£3.62UK£2.063
Jan ’24UK£2.85
UK£3.76
+31.9%
10.6%UK£4.30UK£3.35UK£2.303
Dec ’23UK£3.21
UK£4.02
+25.3%
7.6%UK£4.48UK£3.67UK£2.264
Nov ’23UK£3.15
UK£4.67
+48.1%
19.5%UK£6.12UK£3.66UK£2.304

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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