EOG Resources (EOG) recently reached a new 52 week high following a series of quarterly earnings beats and sustained upward revisions to profit forecasts, bringing renewed focus to its growth profile and valuation.
Recent headlines around EOG Resources have centred on its earnings beats and stronger profit forecasts, and the share price has responded with a 30 day share price return of 9.3% and a year to date share price gain of 46.97% at a recent price of $157.65. The 1 year total shareholder return of 52.88% and 5 year total shareholder return of 112.74% indicate momentum that has been building rather than fading.
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EOG Resources now trades near its 52 week high after strong earnings and brisk gains in recent months. Does the current valuation still offer a favourable trade off between upside potential and downside risk for new buyers?
Most Popular Narrative: 3% Undervalued
Against a recent close of $157.65, the most followed narrative pegs fair value for EOG Resources at $162.00, implying modest undervaluation based on a 7.24% discount rate and a long earnings runway built on inventory depth and capital discipline.
EOG Resources is still integrating and developing the Encino Utica position, where direct well costs are now below $600 per foot and synergy targets of $150 million have already been exceeded ahead of schedule. This can extend the productive drilling runway and support future revenue and earnings.
See why 68 investors see EOG Resources as 3% undervalued.
Result: Fair Value of $162.00 (UNDERVALUED)
Still, the EOG Resources story can be knocked off course if new international and gas focused projects underperform, or if a lower share count fails to offset earnings pressure.
Find out about the key risks to this EOG Resources narrative.
Next Steps
Feeling either excited or cautious about EOG Resources after this run of results and narrative support? Act while the data is fresh and weigh the upside against the red flags by lining up the 3 key rewards and 3 important warning signs.
Looking for more investment ideas beyond EOG Resources?
Do not stop with EOG Resources. Put this momentum in context by lining it up against a broader watchlist built from focused, data driven stock ideas.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include EOG.
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
