BW Energy (OB:BWE) - Share price, News & Analysis

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

BWE (NOK25.62) is trading below our estimate of [[fair value]] (NOK593.14)

BWE fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	5/6
Past Performance	3/6
Financial Health	5/6
Dividends	0/6

BWE Stock Overview

BW Energy Limited engages in the acquisition, exploration, development, and production of oil and natural gas in West Africa and Brazil.

Rewards

Trading at 95.7% below our estimate of its fair value

Earnings are forecast to grow 28.17% per year

Became profitable this year

Risk Analysis

BWE passed our risk checks.

BW Energy Competitors

Panoro Energy

OB:PEN

kr5.8b

OKEA

OB:OKEA

kr4.4b

DNO

OB:DNO

kr12.8b

RAK Petroleum

OB:RAKP

kr3.3b

Price History & Performance

Summary of all time highs, changes and price drops for BW Energy
Historical stock prices
Current Share Price	kr25.62
52 Week High	kr33.95
52 Week Low	kr18.84
Beta	2.49
1 Month Change	2.32%
3 Month Change	-4.90%
1 Year Change	-6.15%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	6.09%

Recent News & Updates

May 13

Returns On Capital Are Showing Encouraging Signs At BW Energy (OB:BWE)

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

	BWE	NO Oil and Gas	NO Market
7D	-6.6%	-4.2%	-1.1%
1Y	-6.2%	80.9%	9.2%

Return vs Industry: BWE underperformed the Norwegian Oil and Gas industry which returned 80.9% over the past year.

Return vs Market: BWE underperformed the Norwegian Market which returned 9.2% over the past year.

Price Volatility

Is BWE's price volatile compared to industry and market?
BWE volatility
BWE Average Weekly Movement	8.4%
Oil and Gas Industry Average Movement	7.4%
Market Average Movement	6.8%
10% most volatile stocks in NO Market	12.6%
10% least volatile stocks in NO Market	3.8%

Stable Share Price: BWE is not significantly more volatile than the rest of Norwegian stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: BWE's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2016	140	Carl Arnet	https://www.bwenergy.no

BW Energy Limited engages in the acquisition, exploration, development, and production of oil and natural gas in West Africa and Brazil. It primarily holds interests in three hydrocarbon licenses located in Dussafu, Gabon; Maromba, Brazil; and Kudu, Namibia. The company was founded in 2016 and is based in Oslo, Norway.

BW Energy Fundamentals Summary

How do BW Energy's earnings and revenue compare to its market cap?
BWE fundamental statistics
Market Cap	US$671.72m
Earnings (TTM)	US$79.80m
Revenue (TTM)	US$350.50m

8.4x

P/E Ratio

1.9x

P/S Ratio

Is BWE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BWE income statement (TTM)
Revenue	US$350.50m
Cost of Revenue	US$148.90m
Gross Profit	US$201.60m
Other Expenses	US$121.80m
Earnings	US$79.80m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 25, 2022

Earnings per share (EPS)	0.31
Gross Margin	57.52%
Net Profit Margin	22.77%
Debt/Equity Ratio	0%

How did BWE perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

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 BWE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BWE. This is calculated by dividing BWE's market cap by their current preferred multiple.
What is BWE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$671.72m

BWE 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	2.2x
Enterprise Value/EBITDA	5.5x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

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

BWE PE Ratio vs Peers

The above table shows the PE ratio for BWE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7.9x
PEN Panoro Energy	17.1x	37.2%	kr5.8b
OKEA OKEA	7x	1.2%	kr4.4b
DNO DNO	4.5x	10.8%	kr12.8b
RAKP RAK Petroleum	3.2x	n/a	kr3.3b
BWE BW Energy	8.4x	28.2%	kr6.6b

Price-To-Earnings vs Peers: BWE is expensive based on its Price-To-Earnings Ratio (8.4x) compared to the peer average (7.9x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: BWE is good value based on its Price-To-Earnings Ratio (8.4x) compared to the Norwegian Oil and Gas industry average (9x)

Price to Earnings Ratio vs Fair Ratio

What is BWE'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.

BWE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.4x
Fair PE Ratio	15x

Price-To-Earnings vs Fair Ratio: BWE is good value based on its Price-To-Earnings Ratio (8.4x) compared to the estimated Fair Price-To-Earnings Ratio (15x).

Share Price vs Fair Value

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

Below Fair Value: BWE (NOK25.62) is trading below our estimate of fair value (NOK593.14)

Significantly Below Fair Value: BWE 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, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is BW Energy forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

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

28.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BWE's forecast earnings growth (28.2% per year) is above the savings rate (1.1%).

Earnings vs Market: BWE's earnings (28.2% per year) are forecast to grow faster than the Norwegian market (0.1% per year).

High Growth Earnings: BWE's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: BWE's revenue (12.4% per year) is forecast to grow faster than the Norwegian market (-1% per year).

High Growth Revenue: BWE's revenue (12.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BWE's Return on Equity is forecast to be high in 3 years time (24.1%)

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Past Performance

How has BW Energy performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

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

27.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BWE has high quality earnings.

Growing Profit Margin: BWE became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: BWE's earnings have grown significantly by 27.1% per year over the past 5 years.

Accelerating Growth: BWE has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: BWE has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-27.5%).

Return on Equity

High ROE: BWE's Return on Equity (13.2%) is considered low.

Discover strong past performing companies

Financial Health

How is BW Energy's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

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

Financial Position Analysis

Short Term Liabilities: BWE's short term assets ($261.8M) exceed its short term liabilities ($132.0M).

Long Term Liabilities: BWE's short term assets ($261.8M) do not cover its long term liabilities ($281.9M).

Debt to Equity History and Analysis

Debt Level: BWE is debt free.

Reducing Debt: BWE has not had any debt for past 5 years.

Debt Coverage: BWE has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: BWE has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is BW Energy current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

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

Dividend Yield vs Market

Notable Dividend: Unable to evaluate BWE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate BWE's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if BWE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if BWE's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as BWE has not reported any payouts.

Discover strong dividend paying companies

Management

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

2.8yrs

Average board tenure

CEO

Carl Arnet (66 yo)

3.08yrs

Tenure

Mr. Carl Krogh Arnet has been the Chief Executive Officer at BW Energy Limited since July 1, 2019. Mr. Arnet has also been the Managing Director of APL since 1996. Prior to joining APL, Mr. Arnet had vario...

Board Members

Experienced Board: BWE's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.

Ownership

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

Insider Trading Volume

Insider Buying: BWE insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31