What is GLNG's Intrinsic value?

Golar LNG Ltd (GLNG) Intrinsic Value Analysis

Executive Summary

As of February 9, 2026, Golar LNG Ltd's estimated intrinsic value ranges from $25.39 to $51.74 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $51.74 +22.4%
Dividend Discount Model (Stable) $25.39 -39.9%

Is Golar LNG Ltd (GLNG) undervalued or overvalued?

With the current market price at $42.27, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Golar LNG Ltd's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.51 0.64
Cost of equity 6.2% 8.4%
Cost of debt 4.0% 4.5%
Tax rate 1.3% 2.3%
Debt/Equity ratio 0.34 0.34
After-tax WACC 5.6% 7.4%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 173.9%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.3%
  • Long-term growth rate: 4.0%
  • Fair value: $51.74 (22.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.4% (Low) to 6.2% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $8 to $43
  • Selected fair value: $25.39 (-39.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $4328M
Enterprise Value $5635M
Trailing P/E 72.37
Forward P/E 28.32
Trailing EV/EBITDA 9.50
Current Dividend Yield 240.35%
Dividend Growth Rate (5Y) 12.28%
Debt-to-Equity Ratio 0.34

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $10.35
Dividend Discount Model (Stable) 43% $3.81
Weighted Average 100% $40.45

Investment Conclusion

Based on our comprehensive valuation analysis, Golar LNG Ltd's intrinsic value is $40.45, which is approximately 4.3% below the current market price of $42.27.

Key investment considerations:

  • Strong projected earnings growth (34% to 45% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 12.28%

Given these factors, we believe Golar LNG Ltd is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.