dc.description.abstract | This thesis aims to answer the research question “What is the fair share value of Aker BP
ASA as of 16th of March 2022.” As of 16th March 2022 Aker, BP traded for NOK 278 per
share at the Oslo Stock Exchange. The fair value was estimated by utilizing the valuation
methods documented by Aswath Damodaran, combined with analytical frameworks such as,
PESTEL, Porter’s Five Forces and VRIO analysis.
The valuation of Aker BP begins with an in-depth strategic analysis of Aker BP’s micro and
macro environment. The results show that several risk aspects have the potential to limit longterm growth and value creation. Following the macro-environmental analysis, an in-depth
analysis of the current market for oil and gas was conducted. The findings are quite significant
in favor of Aker BP and thus give a bullish outlook on future demand and price. Lastly, the
strategic analysis ends with a competitive analysis of Aker BP as well as an in-depth analysis
of the resources and capabilities that are regarded as key drivers for the value creation at Aker
BP. Our strategic analysis concludes that several factors make the oil and gas industry attractive
for the short to medium time for existing companies, and that the resources Aker BP possesses
will be vital for future growth.
Following on, as the next step in the valuation of Aker BP, we present a detailed analysis of
past financial statements to forecast Aker BP`s future performance. The relevance of past
financial statements can be presumed as somewhat limited due to recent mergers and
acquisitions. Nevertheless, an analysis based on the last five years was conducted. The future
performance is estimated as a result of both the industry, company strategic analysis, and
historical financial performances. The cost of equity and cost of debt is estimated to equal
9,13% and 6,11% respectively for the duration of the fundamental valuation.
The fundamental market share value of Aker BP is estimated after subtracting net debt and is
set to equal NOK 365 per share. The relative valuation based on comparable companies
provided an estimated value per share of NOK 355. Lastly and sensitivity analysis was
conducted, and the findings show that the result is heavily sensitive to key performance items
such as production outlook and predicted oil and gas prices. The share price as of 16th of March
2022 was NOK 278, thus based on the fundamental value estimate of NOK 366 and favorable
short to medium-term market outlook, a buy recommendation for Aker BP ASA is provided as
the conclusion of this thesis. | |