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Isramco Negev 2 Limited Partnership (TASE:ISRA) Posted Stronger Results, Is The Valuation Too Rich?

Simply Wall St · 1d ago

Why Isramco Negev 2 Limited Partnership Stock Is Back On Investors’ Radar

Isramco Negev 2 Limited Partnership (TASE:ISRA) is in focus after reporting second quarter and first half 2026 results, with revenue, net income and earnings per share figures all higher than a year earlier.

The latest earnings announcement appears to have rekindled interest in Isramco Negev 2 Limited Partnership. The share price is ₪2.1 and short-term momentum is improving, shown by a 5.00% 7-day share price return and 7.75% 90-day share price return. The 1-year total shareholder return of 3.98% sits against a much stronger 72.12% total shareholder return over three years and a very large 5-year total shareholder return that is close to 3x the starting level. This suggests long-term holders have seen a very different experience compared with more recent buyers.

Spot opportunities similar to Isramco Negev 2 Limited Partnership's recent earnings driven momentum by scanning our hand picked list of 258 high quality undervalued stocks.

After that earnings update and recent share price move, the question now is whether Isramco Negev 2 Limited Partnership trades at a genuine discount to fair value, or if the market is being sensibly cautious ahead of valuation work.

Price-to-Earnings of 15.1x: Is It Justified For Isramco Negev 2 Limited Partnership?

On a simple earnings basis, Isramco Negev 2 Limited Partnership trades on a P/E of 15.1x, compared with an average of 12.2x for its closest peer group and 16.1x for the broader Oil and Gas industry. That puts the current ₪2.1 share price at a premium to peers but slightly below the wider sector level.

The P/E multiple compares the current share price with earnings per share. For a producer like Isramco Negev 2 Limited Partnership, this gives a quick read on how much the market is paying for each unit of profit. With earnings reported as having grown by 14.1% per year over the past 5 years, yet declining 5.8% over the last year and with net profit margins easing from 28.9% to 28.1%, the current P/E suggests investors are not pricing the stock at a clear discount despite that mixed earnings picture.

Compared with peers, the picture is split. The company is described as expensive against the peer average P/E of 12.2x, which implies investors are paying more for each shekel of earnings than for similar Oil and Gas stocks in Asia. At the same time, the 15.1x P/E is slightly below the broader Oil and Gas industry average of 16.1x, so the stock is not at the top end of sector valuations either. This mix of a premium to peers but small discount to the wider industry suggests the market is pricing Isramco Negev 2 Limited Partnership roughly in line with sector expectations rather than as a clear bargain.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 15.1x (ABOUT RIGHT)

However, Isramco Negev 2 Limited Partnership still faces risks from concentrated exposure to Tamar and Dalit, and any setback in those assets could quickly change sentiment.

Find out about the key risks to this Isramco Negev 2 Limited Partnership narrative.

Another View On Isramco Negev 2 Limited Partnership’s Value

The SWS DCF model paints a different picture for Isramco Negev 2 Limited Partnership. With the shares at ₪2.1 and an estimated future cash flow value of ₪1.04, the stock screens as overvalued on this approach. That raises a simple question for investors: which signal deserves more weight, earnings or cash flows?

Look into how the SWS DCF model arrives at its fair value.

ISRA Discounted Cash Flow as at Sep 2026
ISRA Discounted Cash Flow as at Sep 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Isramco Negev 2 Limited Partnership for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 258 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

After considering both the earnings picture and the DCF signal for Isramco Negev 2 Limited Partnership, sentiment appears mixed. This may be a useful time to review the data yourself, act promptly if it changes your thesis, and view the full breakdown of the 1 key reward and 2 important warning signs.

Looking For More Investment Ideas Beyond Isramco Negev 2 Limited Partnership?

If Isramco Negev 2 Limited Partnership has sharpened your focus on valuations and quality, it makes sense to widen your search and compare it with other ideas now.

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.