Has EOG Resources Stock Peaked?

+3.03%
Upside
111
Market
114
Trefis
EOG: EOG Resources logo
EOG
EOG Resources

The shares of EOG Resources (NYSE: EOG) have touched the highs of $140 in recent months, assisted by skyrocketing benchmark oil and gas prices and rising transportation demand. In 2021, the company reported 0.59 MMBPD of liquid production which is almost 0.5% of the global crude oil output. While the geopolitical uncertainty due to the Russia-Ukraine war is leading to spikes in benchmark oil prices, rising inflation is jeopardizing global economic growth and triggering measures such as new energy security alliances. Our interactive dashboard on EOG Resources valuation highlights the historical trends in revenues, earnings, valuation multiple, and forecast for FY2022.

Before the pandemic, EOG Resources revenues observed a 31% annual growth from $7.6 billion in 2016 to $17.3 billion in 2019, assisted by growing benchmark prices and expanding production. EOG’s average realized price for oil has ranged from $42/bbl in 2016 to $65/bbl in 2018 to $58/bbl in 2019. Due to a deep contraction in benchmark prices in 2020, the company reduced total crude oil & natural gas production by just 7.6% as low production costs assisted cash generation. Moreover, the company retained dividend payouts by implementing a prudent capital investment plan and utilizing available cash. Given the recent surge in benchmark oil prices, the company has been returning excess cash to shareholders through dividends and buybacks.

Relevant Articles
  1. More Room For Growth In Pioneer Energy Stock?
  2. Is This Stock A Better Pick Over Occidental Petroleum?
  3. Company of The Day: EOG Resources
  4. More Room For Growth In Antero Resources Stock?
  5. Company Of The Day: EOG Resources
  6. Benchmark Prices To Assist EOG Resources Stock In The Near-Term

EIA and World Bank project a downside in the Brent benchmark

In 2021, the company’s crude oil, natural gas, natural gas liquids, and other products contributed 51%, 37%, 4%, and 8% of total revenues, respectively. With revenues likely to accelerate with rising capital investment, the company announced a net-zero (only scope 1 and scope 2) roadmap by prioritizing opportunities in CCUS (carbon capture, utilization & storage). Per EIA, the Brent benchmark is likely to trend downward from $103 in 2022 to $97 in 2023. Similarly, the World Bank expects Brent crude to observe a decline from $100 in 2022 to $92 in 2023 and $80 in 2024. While the West has imposed stringent sanctions on Russia, the oil & gas embargo is a difficult decision due to multiple transportation and economic concerns.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Jun 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 EOG Return 3% 59% 40%
 S&P 500 Return 0% -14% 84%
 Trefis Multi-Strategy Portfolio 2% -18% 223%

[1] Month-to-date and year-to-date as of 6/7/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates