EOG Resources Stock Has Peaked

+0.97%
Upside
128
Market
129
Trefis
EOG: EOG Resources logo
EOG
EOG Resources

The shares of EOG Resources (NYSE: EOG) have gained 70% this year as the WTI benchmark surged from $50/bbl in early January to $70/bbl at present. The company’s premium drilling strategy has led to a 24% operating cost reduction in the past few years. Thus, returns on capital employed improved despite a downward trend observed in benchmark prices last year. The company has targeted lower capital spending this year while keeping its total production volume comparable to 2019 levels. Notably, the EIA expects benchmark prices to decline by next year as OPEC+ increases production – limiting further upside in EOG Resources stock.

According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price data, EOG Resources stock is likely to move 1.5% in the next one-month (twenty-one trading days) period after experiencing -2.5% contraction in the past week (five trading days).

But how would these numbers change if you are interested in holding EOG Resources stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test EOG Resources stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

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MACHINE LEARNING ENGINE – try it yourself:

IF EOG stock moved by -5% over 5 trading days, THEN over the next twenty-one trading days, EOG stock moves an average of 2 percent, which implies an excess return of just 0.3 percent compared to the S&P 500.

There is 55% probability of a positive return over the next twenty-one trading days and 46.2% probability of a positive excess return.

Some Fun Scenarios, FAQs & Making Sense of EOG Resources Stock Movements:

Question 1: Is the average return for EOG Resources stock higher after a drop?

Answer:

Consider two situations,

Case 1: EOG Resources stock drops by -5% or more in a week

Case 2: EOG Resources stock rises by 5% or more in a week

Is the average return for EOG Resources stock higher over the subsequent month after Case 1 or Case 2?

EOG stock fares better after Case 2, with an average return of 2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.4% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how EOG Resources stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold EOG Resources stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For EOG stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although EOG stock appears to be an exception to this general observation.

EOG’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for EOG Resources stock by changing the inputs in the charts above.

While EOG Resources stock is likely to trend in-line with broader markets, it is helpful to see how its peers stack up. EOG Resources Stock Comparison With Peers summarizes how EOG compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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