As of June 9, 2025, Hess Corp's estimated intrinsic value ranges from $100.24 to $167.64 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $167.64 | +23.1% |
| Discounted Cash Flow (5Y) | $154.03 | +13.1% |
| Dividend Discount Model (Multi-Stage) | $116.31 | -14.6% |
| Dividend Discount Model (Stable) | $100.24 | -26.4% |
| Earnings Power Value | $101.45 | -25.5% |
Is Hess Corp (HES) undervalued or overvalued?
With the current market price at $136.13, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hess Corp's intrinsic value, including:
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 | 0.8 | 0.87 |
| Cost of equity | 7.5% | 9.7% |
| Cost of debt | 4.6% | 5.3% |
| Tax rate | 28.8% | 30.2% |
| Debt/Equity ratio | 0.21 | 0.21 |
| After-tax WACC | 6.8% | 8.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $154 | $55,117M | 76.7% |
| 10-Year Growth | $168 | $59,326M | 59.1% |
| 5-Year EBITDA | $95 | $36,956M | 65.2% |
| 10-Year EBITDA | $121 | $44,931M | 46.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,966M |
| Discount Rate (WACC) | 8.7% - 6.8% |
| Enterprise Value | $34,118M - $43,592M |
| Net Debt | $7,481M |
| Equity Value | $26,637M - $36,111M |
| Outstanding Shares | 309M |
| Fair Value | $86 - $117 |
| Selected Fair Value | $101.45 |
| Metric | Value |
|---|---|
| Market Capitalization | $42101M |
| Enterprise Value | $49582M |
| Trailing P/E | 18.90 |
| Forward P/E | 15.42 |
| Trailing EV/EBITDA | 3.70 |
| Current Dividend Yield | 142.28% |
| Dividend Growth Rate (5Y) | 17.00% |
| Debt-to-Equity Ratio | 0.21 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $50.29 |
| Discounted Cash Flow (5Y) | 25% | $38.51 |
| Dividend Discount Model (Multi-Stage) | 20% | $23.26 |
| Dividend Discount Model (Stable) | 15% | $15.04 |
| Earnings Power Value | 10% | $10.14 |
| Weighted Average | 100% | $137.24 |
Based on our comprehensive valuation analysis, Hess Corp's weighted average intrinsic value is $137.24, which is approximately 0.8% above the current market price of $136.13.
Key investment considerations:
Given these factors, we believe Hess Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.