Stephens has begun coverage of EOG Resources (EOG, Financial) with an Equal Weight rating and set a price target of $137. The company boasts a "best-in-class, under-levered" balance sheet, expecting to generate approximately $4 billion in free cash flow. This financial strength positions EOG favorably for an aggressive share buyback strategy. Additionally, the firm anticipates that EOG will continue enhancing their capital efficiencies as extended laterals help reduce well costs in the Delaware Basin and Eagle Ford, where the company already leads its peers.
If the natural gas markets remain robust, EOG might adjust its focus toward gas-heavy assets, particularly in light of its recent Encino acquisition. This strategic move could potentially capitalize on favorable market conditions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for EOG Resources Inc (EOG, Financial) is $138.94 with a high estimate of $158.00 and a low estimate of $118.00. The average target implies an upside of 12.80% from the current price of $123.18. More detailed estimate data can be found on the EOG Resources Inc (EOG) Forecast page.
Based on the consensus recommendation from 31 brokerage firms, EOG Resources Inc's (EOG, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for EOG Resources Inc (EOG, Financial) in one year is $131.20, suggesting a upside of 6.51% from the current price of $123.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the EOG Resources Inc (EOG) Summary page.
EOG Key Business Developments
Release Date: May 02, 2025
- Adjusted Net Income: $1.6 billion.
- Free Cash Flow: $1.3 billion.
- Adjusted Earnings Per Share: $2.87.
- Adjusted Cash Flow Per Share: $5.09.
- Cash Returned to Shareholders: $1.3 billion through dividends and share repurchases.
- Capital Expenditure (CapEx) Plan: $6 billion for 2025.
- Debt Repayment: $500 million debt maturity repaid in April.
- Cash Balance: $6.6 billion at the end of the first quarter.
- Long-term Debt: $4.7 billion.
- Oil Production Growth: Approximately 2% year-over-year.
- Natural Gas Production Growth: Approximately 12% year-over-year.
- Share Repurchases: Nearly $5 billion over nine consecutive quarters, reducing share count by 7%.
- Bolt-on Acquisition in Eagle Ford: $275 million, adding over a year of drilling inventory.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EOG Resources Inc (EOG, Financial) delivered $1.6 billion in adjusted net income and generated $1.3 billion in free cash flow in the first quarter of 2025.
- The company returned $1.3 billion to shareholders through dividends and share repurchases, demonstrating a strong commitment to shareholder value.
- EOG Resources Inc (EOG) has a diverse multi-basin portfolio with over 10 billion barrels of oil equivalent of high-quality resources, positioning it for long-term sustainable growth.
- The company announced a successful oil discovery in its Trinidad asset, enhancing its international exploration success.
- EOG Resources Inc (EOG) is reducing capital investments by $200 million while maintaining oil production levels, optimizing free cash flow and supporting a 2% year-over-year oil growth.
Negative Points
- Speculation on oil demand impacts due to tariff announcements has softened prices, affecting near-term market conditions.
- The company is facing potential near-term impacts on global demand, leading to a cautious approach in capital investment.
- EOG Resources Inc (EOG) has reduced activity in some of its legacy assets, including the Delaware Basin and the Eagle Ford, which may impact future production growth.
- The company is assuming flat service pricing for high-spec rigs and frac equipment, which could limit cost reduction opportunities.
- There is uncertainty regarding the impact of tariffs on well costs beyond 2025, which could affect future financial performance.
