Equinor is the dominant operator on the Norwegian continental shelf, USD-reporting, 67% state-owned via the Norwegian government, with record LTM production of 2,313 MBOE/d (+9% YoY) driven by Johan Castberg, Halten East and Verdande. On adjusted LTM Q1 2026 numbers it earns USD 27.6B of adjusted EBIT (26.4% margin ex-impairments) but only 5.9B of NOPAT after a 78.7% effective tax rate, leaving adjusted ROIC at 7.5% against a 9% WACC and economic profit of −USD 1.2B on a 78.2B invested-capital base.
The op frame understates equity economics: the 78% NCS levy is symmetric, so the state effectively co-funds capex, and cash generation to shareholders is strong — FY2025 OCF of USD 20.0B less 13.1B organic capex left ~6.9B of FCF against 10.7B of dividends and buybacks. That gap was bridged with debt (finance debt up from 19.4B end-2024 to 27.7B at Q1 2026), a payout cadence that is comfortable at current commodity prices but not through-cycle.
The renewables allocation debate is live. The Power segment lost USD 1.6B in reported NOI in FY2025, Empire Wind took a 955M impairment on US regulatory reversal, and yet the company holds a ~3.5B, 10% stake in Ørsted — offshore-wind exposure by another door. Against that, portfolio discipline is visible in the Argentina exit (~700M cash plus Vista shares, ~400M gain) and the UK Adura JV with Shell. State ownership anchors the dividend but caps strategic flexibility.
Bridging adjusted NOPAT of USD 5.9B through net debt, reverse-DCF fair EV runs USD 63.1B (zero growth) to 61.9B (GDP growth) against a market EV of 80.3B — the market pays a 21-23% premium to conservative intrinsic value, implied 5-year growth is pinned at the 7.1% model boundary, and PEBV is 2.0. At the equity level that is roughly NOK 150-155 per share against NOK 313.5. The op frame overstates the gap for an NCS producer given the symmetric tax, but even the friendly framing leaves no margin of safety.
Base NOK 300 (−4%): the negative EP spread and reverse-DCF premium offset the ~7% annual payout yield over 24 months. Bull NOK 380 (+21%): Brent strength or a European gas shock flows straight through NCS gas leverage while buybacks shrink the count. Bear NOK 210 (−33%): a Brent downcycle converges the price toward the reverse-DCF floor, cushioned by the dividend.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~7.1%, limited by ROIC 8% ≈ WACC 9%) it cannot reach the current EV. No-growth value is $-20/share (-6% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | $380 | ≥7% | +21% | 25% | Brent/Euro-gas strength; NCS gas leverage plus buybacks |
| Base | $300 | ≥7% | -4% | 45% | Roughly flat: rDCF premium offset by ~7% payout yield |
| Bear | $210 | ≥7% | -33% | 30% | Brent downcycle; converges toward rDCF fair ~NOK 150 |
| Prob-weighted | $293 | — | -7% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 7.50% | -14 | -13 | -13 | -13 | -14 | -15 |
| 8.25% | -17 | -18 | -18 | -19 | -19 | -22 |
| 9.00% (base) | -20 | -21 | -22 | -23 | -24 | -27 |
| 9.75% | -23 | -24 | -24 | -26 | -27 | -31 |
| 10.50% | -25 | -26 | -27 | -28 | -30 | -34 |
Green = fair value above the current price of $313.50. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Pipeline gas to Europe prices off TTF; any supply disruption flows straight to EBIT.
2,313 MBOE/d in Q1 2026, +9% YoY; guidance +3% for 2026 on Castberg, Halten East, Verdande.
USD 3.9B dividend plus 1.5B buyback planned for 2026, roughly 7% of market cap.
Argentina exit (~USD 700M plus Vista shares) and the UK Adura JV concentrate capital on the core.
The 78% NCS levy is symmetric — the state co-funds capex, so equity cash returns exceed what gross ROIC implies.
Equinor is a low-cost NCS cash machine whose adjusted economics are pinched from both ends — an 78.7% tax rate on the income statement and an OCI-restored USD 78B capital base on the denominator — leaving ROIC below WACC and no margin of safety in the reverse-DCF at record production. The payout stream is real but partly debt-assisted. HOLD, medium conviction; base NOK 300.
A Brent-led pullback toward NOK 220-240 would restore a margin of safety against the reverse-DCF floor and make the ~7% payout yield genuinely cheap; a European gas-supply shock is the bull path. At NOK 313.5 the market already pays for a full cycle.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
NOPAT adjustments: Inga NOPAT-justeringar i denna post. Impairments hanteras i post_tax_addbacks (se nedan). Petoro-swap-gain (+491M Q1 2025) var i de subtraherade Q1 2025-siffrorna → ingår ej i LTM ✓. Exploration expenses (LTM ~900M) är en RECURRING kostnad i olja/gas-sektorn — ingen addback per industriell sektor-checklista. Pensionsränta inkluderas operativt (DBO-plan). SBC: ej verifierat ur Q-rapport; bedömt som litet (< 300M USD/år) relativt 25B EBIT — behålls i opex.
Post-tax add-backs: LTM net impairments = FY2025 (−2,481M) − Q1 2025 (−145M) + Q1 2026 (0M) = −2,336M. FY2025 impairment-komponenter: Renewables Empire Wind 1/South Brooklyn Marine Terminal −955M (Q2 2025, regulatoriska/tariff-förändringar), Renewables early-phase projects −252M (Q4 2025), E&P International UK/Brazil tillgångar −851M (varav UK/Brazil-disposals och Peregrino-impairment), E&P USA offshore −385M, MMP reversal +283M. Q1 2025: Renewables −145M. Q1 2026: 0M. Post-tax addback = 2,336 × (1−0.787) = 497M. OBS: Empire Wind-impairmentet (955M) är primärt från ett kapitalprojekt under uppbyggnad och reflekterar regulatorisk politikförändring — genuint engångsposter. UK/Brazil disposalförluster är portföljrensning.
Company add-backs we reject: Equinor är ett E&P-bolag med minimal M&A-driven PPA-amortisering (goodwill är liten relativt total IC). Intangibles 5,950M inkluderar primärt exploration assets och licenser — dessa amortiseras som del av DD&A (DD&A = normal depletion). Ingen PPA-addback motiverad. SBC: ej läst ur rapport; Equinor har aktiebaserade incitamentsprogram men storleken ej verifierad — behandlas som 0 för nu (konservativt, effekt < 0.3% av NOPAT).
Invested capital: BS snapshot 31 Mar 2026 (Q1 2026). Total equity 43,642M (shareholders 43,571 + NCI 71). OCI-justering: Foreign currency translation reserve −8,919M + OCI from equity accounted investments +319M = −8,600M netto ackumulerad OCI (Dec 31, 2025 per 20-F FY2025). equity_ex_oci = 43,642 − (−8,600) = 52,242M. VARNING: OCI-data från Dec 31, 2025 (20-F); Q1 2026 OCI-rörelse ej verifierad — Q1 2026 equity table ej tillgänglig. Pension remeasurements inkluderas i Retained earnings (ej separat OCI-kolumn per Equinor redovisning). Finance debt: non-current 22,162 + current 5,542 = 27,704M (exkl. lease liabilities 4,153M). Pension: liabilities 4,182 − assets 2,143 = 2,039M netto DBO. Cash 5,884M. IC = 52,242 + 27,704 + 2,039 − 3,796.3 = 78,188.7M USD. OCI-data: SEC EDGAR accession 0001140625-26-000013 (FY2025 20-F, filed 2026-03-19).
Pages read — FY: [16, 17, 18, 19, 20, 22, 23, 24, 25, 26, 33, 37] · Q: [4, 8, 21, 22, 23, 26, 27, 28] 📄 p.16
How the mttssn view has evolved — each prior dated note is preserved.