What To Expect From EOG Stock Post Q4?

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EOG Resources

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 fourth-quarter results on Friday, February 24. We expect EOG stock to trade higher post Q4 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 during the first half of FY 2022, the company is growing a windfall of excess cash. The company has provided guidance for low double-digit year-over-year (y-o-y) volume growth in 2023, including low single-digit oil growth. This growth is expected to be driven by higher activity at Dorado and the Powder River Basin, as well as a higher mix of deeper targets in the Delaware Basin Wolfcamp play, which has a higher percentage of natural gas. EOG has expanded its operations to include seven significant resource basins with the addition of the Utica Combo in Ohio. That said, this low-cost structure and diverse portfolio of high-return plays make it well-positioned to weather any potential downturn in the energy industry going forward.

Our forecast indicates that EOG’s valuation is around $138 per share, which is almost 17% higher than the current market price. Look at our interactive dashboard analysis on EOG Resources Earnings Preview: What To Expect in Q4? for more details.

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(1) Revenues expected to be slightly ahead of the consensus estimates

Trefis estimates EOG’s Q4 2022 revenues to be around $6.8 Bil, slightly ahead of the consensus estimate. EOG reported quarterly revenue of $7.59 billion in Q3, which was up 59% from a year ago. The company’s total crude oil production in Q3 of 465,100 barrels of oil per day (bopd) was above the midpoint of the guidance range and in line compared with Q2 2022 production. The company accumulated 395k net acres and 135k mineral acres at a total cost of less than $500 million and expects to complete 20 proprietary wells by 2023, in addition to the 18 legacy wells already in operation.

(2) EPS likely to marginally beat consensus estimates

EOG’s Q4 2022 earnings per share (EPS) is expected to be $3.42 as per Trefis analysis, marginally beating the consensus estimate of $3.36. In Q3, the company’s non-GAAP earnings per share were $3.71, slightly below expectations but still up significantly from $2.16 a year ago.

(3) Stock price estimate higher than the current market price

Going by our EOG’s Valuation, with an EPS estimate of around $13.25 and a P/E multiple of around 10.4x in fiscal 2022, this translates into a price of nearly $138, which is 17% 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.

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 Feb 2023
MTD [1]
YTD [1]
Total [2]
 EOG Return -10% -8% 18%
 S&P 500 Return -2% 4% 79%
 Trefis Multi-Strategy Portfolio -4% 7% 237%

[1] Month-to-date and year-to-date as of 2/22/2023
[2] Cumulative total returns since the end of 2016

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