EOG Resources (NYSE: EOG), an energy company engaging in the exploration, development, production, and marketing of crude oil and natural gas, is scheduled to announce its fiscal second-quarter results on Thursday, August 4. We expect EOG stock to trade higher past Q2 with both revenue and earnings beating market expectations. EOG is one of the lowest-cost oil producers in the country, and thanks to the high oil prices, the company is growing a windfall of excess cash. That said, EOG generated $2.4 billion of free cash flow in Q1. With its surging free cash flow, EOG is poised to return a large portion of it to shareholders. This year, it expects to pay out upward of $5 billion in dividends after setting a target of returning at least 60% of its excess cash to investors.
Our forecast indicates that EOG’s valuation is around $114 per share, which is 7% higher than the current market price. Look at our interactive dashboard analysis on EOG Resources Earnings Preview: What To Expect in Q2? for more details.
(1) Revenues expected to be slightly ahead of the consensus estimates
Trefis estimates EOG’s Q2 2022 revenues to be around $6.2 Bil, slightly ahead of the consensus estimate. In Q1, the company produced an average of 883,000 barrels of oil equivalent per day (BOE/d). This was 2.3% higher than its Q4 output and 13.4% above the year-over-year level. In addition, crude prices averaged $94.38 per barrel in the quarter, up more than 20% from the fourth quarter. Consequently, EOG generated cash flow from operations before changes in working capital came in at $3.4 billion in Q1, driven by higher production and oil prices.
(2) EPS likely to match consensus estimates
EOG’s Q2 2022 earnings per share (EPS) is expected to be $2.69 as per Trefis analysis, matching the consensus estimate of $2.67. The oil company’s adjusted earnings per share grew almost 2.5x y-o-y to $4.00 per share in the first quarter.
(3) Stock price estimate higher than the current market price
Going by our EOG’s Valuation, with an EPS estimate of around $9.66 and a P/E multiple of around 11.8x in fiscal 2022, this translates into a price of near $114, which is 7% higher than the current market price.
It is helpful to see how its peers stack up. EOG Resources Peers shows how EOG stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
|S&P 500 Return||-1%||-14%||83%|
|Trefis Multi-Strategy Portfolio||0%||-13%||242%|
 Month-to-date and year-to-date as of 8/3/2022
 Cumulative total returns since the end of 2016