Equinor: Including 72% Tax Rate, Priced At 5x FCF

Nov. 29, 2022 8:27 AM ETEquinor ASA (EQNR)11 Comments

Summary

  • Equinor's effective tax rate is 72%. But beyond this, there's still a lot to like.
  • By my estimates, including the increasing variable dividend, Equinor's total combined dividend reached a 10% yield for Q3.
  • On top of that, there's also approximately 6% of annualized buybacks, in Q4.
  • By my estimates, Equinor is priced at approximately 5x next year's free cash flows.
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Investment Thesis

Equinor's (NYSE:EQNR) share price is being depressed by investors' fear that as Equinor makes increasing profits, its future cash flows will be increasingly taxed, perhaps even retrospectively.

As I run through different taxes assumptions, I contend that

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