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 lower past Q2 with both revenue and earnings missing market expectations marginally. EOG’s stock price has been affected more by the macroeconomic outlook than its profitability, with economic indicators pointing to a slowdown. Despite high profits and a modest valuation, EOG’s stock may continue to tread water in the short term. Oil prices have been surprisingly lower than expected at the beginning of the year, with prices jumping only recently due to a falling U.S. dollar and supply cuts by the world’s biggest oil exporters (Saudi Arabia and Russia).
Our forecast indicates that EOG’s valuation is around $123 per share, which is 6% lower 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 below the consensus estimates
Trefis estimates EOG’s Q2 2023 revenues to be around $5.2 Bil, slightly below the consensus estimate. In Q1, EOG’s revenues jumped 52% year-over-year (y-o-y) to $6 billion. The company’s cash flow from operations also nearly quadrupled y-o-y to $3.25 billion. During the first quarter, its average crude oil price fell ~20% to $77.26 per barrel and its average natural gas liquids price plunged 35% to $25.67 per barrel, but total volumes rose 7% to 943K barrels of oil equivalent per day (boe/day) from 883K boe/day a year ago.
(2) EPS likely to miss consensus estimates
EOG’s Q2 2023 earnings per share (EPS) is expected to be $2.31 as per Trefis analysis, marginally missing the consensus estimate of $2.33. In Q1, its net income surged more than five-fold to $2 billion, or $3.45 per share, from $390 million, or $0.67 per share, in the year-earlier quarter.
(3) Stock price estimate lower than the current market price
Going by our EOG’s Valuation, with an EPS estimate of around $11.86 and a P/E multiple of around 10.4x in fiscal 2023, this translates into a price of near $123, which is almost 6% lower 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 portfolio that aims for long-term growth? Here’s a value portfolio that’s done much better than the market since 2016.
|S&P 500 Return||3%||19%||105%|
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