If you are weighing your options with Woodside Energy Group, you are not alone. Plenty of folks are eyeing this energy heavyweight and asking themselves if it is finally undervalued, or if that is just the same old optimism talking. Woodside’s stock price has bounced around lately, most notably up 3.3% in the past week and managing a 1.7% gain over the last year. But it has been a choppy ride, with the stock still down 7.2% year to date despite a substantial 86.4% gain over five years.

Behind these numbers are recent headlines that have nudged the company’s risk profile. For example, the big news about shifting government policies on energy exports and expanding green portfolio investments has attracted both new interest and, at the same time, some raised eyebrows from more risk-averse investors. While not every story sends ripples through the share price, taken together, they have helped shape the perception of Woodside’s long-term prospects.

Now, onto the all-important value question. Using six major valuation checks, Woodside racks up a value score of 5, meaning it screens as undervalued on a clear majority of measures. This is a compelling starting point for any deep-dive analysis. In a moment, we will walk through each valuation approach and see exactly where Woodside shines and where it falls behind. And if you are searching for a truly insightful take on what the numbers mean, stick around for the end where we unveil a smarter way to understand Woodside’s valuation story.

Woodside Energy Group delivered 1.7% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: Woodside Energy Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company is worth by projecting its future cash flows and discounting them back to today's dollars. This approach helps investors gauge the company's intrinsic value, factoring in both near-term analyst forecasts and long-term assumptions.

For Woodside Energy Group, the latest reported Free Cash Flow (FCF) stands at $1.17 Billion. Over the next five years, analysts see this growing to $3.92 Billion by the end of 2029. Beyond that, the model uses standard industry growth rates to extrapolate further. This results in a steady climb in FCF through 2035. All projections are expressed in dollars, as per the company's reporting currency.

According to the DCF analysis, Woodside’s intrinsic value is calculated at $90.66 per share. Since the current share price implies a 74.4% discount to this fair value, the stock appears clearly undervalued based on projected cash flows.

Story Continues

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Woodside Energy Group.WDS Discounted Cash Flow as at Oct 2025

Our Discounted Cash Flow (DCF) analysis suggests Woodside Energy Group is undervalued by 74.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Woodside Energy Group Price vs Earnings

The Price-to-Earnings (PE) ratio is a popular and effective tool for valuing profitable companies like Woodside Energy Group, as it links the company’s market price directly to each dollar of underlying earnings. Investors typically look to PE ratios to gauge how much they are paying for a company’s earning power. Higher ratios can sometimes reflect strong growth prospects or lower perceived risk, while lower ratios may suggest the opposite.

Woodside’s current PE ratio is 9.7x, which stands out when compared to the oil and gas industry average of 13.0x and the broad peer group average of 22.6x. This difference indicates the market is pricing Woodside’s earnings more conservatively, potentially due to risk factors or uncertainty around future growth.

To get a clearer and more tailored picture, Simply Wall St’s “Fair Ratio” comes into play. The Fair Ratio is a proprietary benchmark that accounts not just for peer and industry trends, but also incorporates company-specific factors such as Woodside’s earnings growth, profit margins, financial risks, industry position, and market size. This makes it a more nuanced gauge of a fair multiple to pay for a business.

For Woodside, the Fair PE Ratio is 13.7x, well above the current 9.7x. This suggests that, even after factoring in the company’s specific circumstances, the stock is currently priced below its fair value using the PE approach.

Result: UNDERVALUEDASX:WDS PE Ratio as at Oct 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Woodside Energy Group Narrative

Earlier, we mentioned that there is an even better way to understand valuation. Let's introduce you to Narratives. A Narrative is your unique story or perspective about a company that connects what you believe about its future, such as its growth, risks, and industry shifts, to specific financial forecasts like revenue, earnings, and fair value.

Unlike traditional analysis that relies solely on numbers, Narratives let you blend the data with your own assumptions and interpretations. This approach turns complex valuation into something personal and actionable. On Simply Wall St’s Community page, millions of investors easily build or explore Narratives, so you can see real-world examples and even create your own—all within a few clicks.

The real power of Narratives is that they help you make clearer decisions by showing at a glance whether your assumptions signal a buy or sell as you compare your Fair Value to the live share price. Since all Narratives update automatically as soon as new news, results, or facts are available, your story stays relevant as the market changes.

For example, one investor might build a Narrative for Woodside Energy Group assuming robust LNG demand and flawless project execution, landing at a fair value of A$42.16 per share. Another investor, more cautious about regulatory hurdles and rapid renewables growth, could see fair value as low as A$22.76.

Do you think there's more to the story for Woodside Energy Group? Create your own Narrative to let the Community know!ASX:WDS Community Fair Values as at Oct 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include WDS.AX.

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