EOG Resources Faces Headwinds Amid Market Growth
With a market capitalization of $71.9 billion, EOG Resources, Inc. (EOG) is a major player in the oil and gas exploration and production sector. The company actively develops and markets crude oil, natural gas, and natural gas liquids across the United States, Trinidad and Tobago, and beyond.
Stock Performance Dips Below Market Trends
Over the past year, EOG’s stock has not kept pace with the wider market. In the last 52 weeks, EOG has seen an increase of 3.1%, in contrast to the broad S&P 500 Index ($SPX), which has surged 36.4%. This year, EOG’s shares have gained 4.6%, while SPX’s return stands at 25.2% year-to-date.
Additionally, EOG has struggled against the Energy Select Sector SPDR Fund (XLE), which has also posted an 11.1% gain in the same timeframe.
Third Quarter Results Show Resilience
EOG’s recent performance can be attributed to its dependence on variable commodity prices and overall market uncertainty, exacerbated by issues like interest rate concerns and international tensions. Despite these challenges, on November 7, EOG Resources exceeded Q3 profit estimates, posting an adjusted profit of $2.89 per share. This success was largely due to increased production, even in a lower-price environment. The company also announced a $5 billion increase to its share repurchase program, along with a 7% dividend hike, while continuing to maintain robust free cash flow. EOG projected an increase in Q4 production, estimating between 1.08 and 1.11 million barrels of oil equivalent per day.
For the fiscal year ending in December, analysts expect EOG’s earnings per share (EPS) to drop slightly by 1.8% year-over-year to $11.48. The company’s recent earnings surprises have been inconsistent, with three beats and one miss in the last four quarters.
Analyst Consensus Offers Cautious Optimism
According to a survey of 27 analysts, the overall rating for EOG stock is a “Moderate Buy.” This recommendation includes 14 “Strong Buys” and 13 “Holds.”
On October 16, Siebert Williams raised EOG’s price target to $157 and maintained its “Buy” rating, although they anticipate that many oil and gas companies, including EOG, may report earnings misses due to pricing pressures and seasonal shifts.
At present, EOG trades below the average price target of $141.78, with a potential upside of 28.1% suggested by the highest target of $162.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
