As of May 22, 2025, National Fuel Gas Co has a Discounted Cash Flow (DCF) derived fair value of $89.92 per share. With the current market price at $81.32, this represents a potential upside of 10.6%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $42.90 |
| DCF Fair Value (10-year) | $89.92 |
| Potential Upside (5-year) | -47.2% |
| Potential Upside (10-year) | 10.6% |
| Discount Rate (WACC) | 5.2% - 6.5% |
Revenue is projected to grow from $1945 million in 09-2024 to $4854 million by 09-2034, representing a compound annual growth rate of approximately 9.6%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 09-2024 | 1945 | 11% |
| 09-2025 | 2557 | 31% |
| 09-2026 | 2859 | 12% |
| 09-2027 | 3086 | 8% |
| 09-2028 | 3352 | 9% |
| 09-2029 | 3544 | 6% |
| 09-2030 | 3701 | 4% |
| 09-2031 | 3958 | 7% |
| 09-2032 | 4261 | 8% |
| 09-2033 | 4559 | 7% |
| 09-2034 | 4854 | 6% |
Net profit margin is expected to improve from 4% in 09-2024 to 5% by 09-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 09-2024 | 78 | 4% |
| 09-2025 | 102 | 4% |
| 09-2026 | 123 | 4% |
| 09-2027 | 142 | 5% |
| 09-2028 | 163 | 5% |
| 09-2029 | 182 | 5% |
| 09-2030 | 191 | 5% |
| 09-2031 | 207 | 5% |
| 09-2032 | 224 | 5% |
| 09-2033 | 242 | 5% |
| 09-2034 | 260 | 5% |
with a 5-year average of $844 million. Projected CapEx is expected to maintain at approximately 44% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 09-2025 | 927 |
| 09-2026 | 1029 |
| 09-2027 | 1140 |
| 09-2028 | 1234 |
| 09-2029 | 1361 |
| 09-2030 | 1462 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 37 |
| Days Inventory | 112 |
| Days Payables | 232 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 613 | 11 | 565 | 77 | (39) |
| 2026 | 1375 | 27 | 1263 | (38) | 123 |
| 2027 | 1524 | 31 | 1364 | 11 | 119 |
| 2028 | 1662 | 35 | 1481 | 48 | 97 |
| 2029 | 1825 | 39 | 1566 | (2) | 221 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 42.90 | -47.2% |
| 10-Year DCF (Growth) | 89.92 | 10.6% |
| 5-Year DCF (EBITDA) | 62.93 | -22.6% |
| 10-Year DCF (EBITDA) | 80.02 | -1.6% |
Is National Fuel Gas Co (NFG) a buy or a sell? National Fuel Gas Co is definitely a buy. Based on our DCF analysis, National Fuel Gas Co (NFG) appears to be moderately undervalued with upside potential of 10.6%. 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 buy at the current market price of $81.32.