As of May 29, 2025, JKX Oil and Gas PLC has a Discounted Cash Flow (DCF) derived fair value of $149.92 per share. With the current market price at $41.50, this represents a potential upside of 261.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $144.64 |
| DCF Fair Value (10-year) | $149.92 |
| Potential Upside (5-year) | 248.5% |
| Potential Upside (10-year) | 261.3% |
| Discount Rate (WACC) | 7.6% - 10.8% |
Revenue is projected to grow from $70 million in 12-2020 to $90 million by 12-2030, representing a compound annual growth rate of approximately 2.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2020 | 70 | 32% |
| 12-2021 | 72 | 4% |
| 12-2022 | 75 | 4% |
| 12-2023 | 78 | 3% |
| 12-2024 | 79 | 2% |
| 12-2025 | 81 | 2% |
| 12-2026 | 83 | 2% |
| 12-2027 | 85 | 3% |
| 12-2028 | 87 | 2% |
| 12-2029 | 88 | 2% |
| 12-2030 | 90 | 2% |
Net profit margin is expected to improve from 30% in 12-2020 to 30% by 12-2030, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2020 | 21 | 30% |
| 12-2021 | 22 | 30% |
| 12-2022 | 23 | 30% |
| 12-2023 | 23 | 30% |
| 12-2024 | 24 | 30% |
| 12-2025 | 24 | 30% |
| 12-2026 | 25 | 30% |
| 12-2027 | 25 | 30% |
| 12-2028 | 26 | 30% |
| 12-2029 | 26 | 30% |
| 12-2030 | 27 | 30% |
with a 5-year average of $16 million. Projected CapEx is expected to maintain at approximately 19% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2021 | 17 |
| 12-2022 | 16 |
| 12-2023 | 17 |
| 12-2024 | 14 |
| 12-2025 | 14 |
| 12-2026 | 15 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 12 |
| Days Inventory | 37 |
| Days Payables | 16 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2021 | 21 | 2 | 7 | 0 | 12 |
| 2022 | 42 | 4 | 14 | (0) | 24 |
| 2023 | 43 | 4 | 14 | 1 | 24 |
| 2024 | 41 | 5 | 15 | 0 | 22 |
| 2025 | 42 | 5 | 15 | 0 | 22 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 144.64 | 248.5% |
| 10-Year DCF (Growth) | 149.92 | 261.3% |
| 5-Year DCF (EBITDA) | 74.99 | 80.7% |
| 10-Year DCF (EBITDA) | 96.78 | 133.2% |
Is JKX Oil and Gas PLC (JKX.L) a buy or a sell? JKX Oil and Gas PLC is definitely a buy. Based on our DCF analysis, JKX Oil and Gas PLC (JKX.L) appears to be significantly undervalued with upside potential of 261.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $41.50.