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    Woodside (ASX:WDS) Shares Could Be 42% Undervalued After LNG Supply Deal

    Simply Wall St·11/01/2026 16:37:55
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    Woodside Energy Group has been a strong performer over the past few years. With the stock recently closing at A$33.33, the real question now is how well that price lines up with the cash flows the business is expected to generate. With major liquefied natural gas commitments locked in and the portfolio being reshaped, investors are increasingly asking whether those future cash streams justify where Woodside trades today.

    • Woodside has delivered a 115.8% return over 5 years, which puts a lot of past optimism into the current price and makes the link to future cash generation more important than ever.
    • A 20 year LNG supply deal tied to the Louisiana project, alongside progress at Scarborough and selected asset sales, may support visibility on long dated cash inflows while also shifting where capital is committed across the portfolio.
    • If you'd rather focus on earnings, this one's for you. See what Woodside Energy Group's 14.5x P/E says about the price.

    The issue now is whether the cash flows implied by Woodside Energy Group's business today are enough to support its current share price on an intrinsic value basis.

    If you are weighing whether Woodside Energy Group's cash flows justify A$33.33, it can help to compare that question across 1 high quality undervalued stocks

    Is Woodside Energy Group Still Cheap on Cash Flow?

    The Discounted Cash Flow (DCF) model here focuses on Woodside Energy Group's future cash that could be available to shareholders. Latest twelve month free cash flow is a loss of $165.37 million, yet analyst projections move quickly to multi billion positive figures over the coming decade, which implies a business expected to generate sizeable cash once current projects bed in.

    Those projections assume recovering free cash flows that stabilise at a relatively steady level, which fits a mature LNG producer with long contracts rather than a high growth early stage operator. The DCF outcome points to an estimated intrinsic value substantially above A$33.33. Because the 20 year LNG supply deal on the Louisiana project locks in visibility on part of those future inflows, the market price may not yet fully reflect the contracted cash outlook underpinning the model's valuation gap. Find out what Woodside Energy Group could be worth using our Discounted Cash Flow (DCF) estimate.

    The Woodside Energy Group Narrative: What Would Justify Today's Price?

    Simply Wall St Narratives for Woodside Energy Group pick up where this valuation puzzle leaves off. They explain which paths for Woodside Energy Group's growth, margins and earnings would need to hold for the share price to sit meaningfully above or below where it trades today. Each narrative ties a fair value to a specific set of potential catalysts and risks so you can track which version of the story appears to be unfolding on the Community page.

    Community views on Woodside Energy Group are split between those who see enough project delivery and LNG demand to justify the current price and those who worry execution and policy risks are being underappreciated.

    Bull case: roughly fairly valued

    "Robust project delivery, cost efficiencies, and diversification into low-carbon segments position Woodside for long-term growth, improved competitiveness, and strong shareholder returns..."

    Discover why this Narrative puts Woodside Energy Group at roughly fairly valued.

    Bear case: 12% overvalued

    "The experience with Beaumont New Ammonia, acquired for more than US$2.35b and now earmarked for sale after feedstock issues and softer low carbon ammonia demand..."

    Explore why this Narrative puts Woodside Energy Group at 12% overvalued.

    Before you move on, Woodside Energy Group has more you may want to check

    Valuation only tells part of the story. Simply Wall St's broader review of Woodside Energy Group has surfaced specific concerns that deserve a look before you lean on any cash flow model too heavily. Take a closer look at 2 warning signs (1 major) before settling on a valuation.