EOG Resources (EOG) stock forecast: will shares rise?
By Yoke Wong
Edited by Vanessa Kintu
16:26, 14 January 2022
US-headquartered oil and gas producer EOG Resources (EOG) share prices rose over the past two weeks as the group’s third-quarter income soared.
The Houston-based company operates oil and gas wells and production facilities in the US, Trinidad and Tobago, and China. EOG also plans to drill an exploration well (Beehive-1) in Offshore Western Australia in 2022 to 2023. According to the pre-drill seabed assessment in December 2021, the drilling activity is expected to be in April to August 2022.
According to financial data provider CompaniesMarketCap.com, EOG Resources’ market capitalisation is at $60.12bn.
The New York Stock Exchange (NYSE)-listed EOG Resources’s share price increased to $102.02 on 13 January. However, the stock price is still well below the all-time high of $128.94, achieved on 1 July 2018, EOG resources historical stock price shows. Stock prices began the year at $90.47 on 3 January and have gained 12.8% over the past two weeks, currently standing at $102 at the time of writing (14 January).
EOG resources stock value rose for most of 2021 amid higher oil and gas prices. The rising energy prices boosted EOG’s earnings for the year, leading to increased dividend pay-out for the group’s shareholders.
Are you interested in finding out more about EGO stock market outlook? Read this EOG stock analysis to learn about the latest EOG Resources stock news and analysts’ EOG stock predictions.
Rising revenue in Q3’ 2021
EOG’s revenue in the third-quarter last year rose to $4.765bn, more than double from the same period in 2020. The group’s net income also jumped to $1.095bn, compared with $42m losses in Q3 2020.
The income was driven by higher oil prices this year and the Q3 benchmark price for WTI Oil was at $70.55 a barrel, up 72.3% from the same quarter in 2020.
As a result of the higher earnings, EOG has increased its regular dividend by 82% to an indicated annual rate of $3.00 a share. The board has also declared a special dividend of $2.00 a share.
Additionally, the group’s crude oil equivalent output in Q3 rose to 844.4m barrels of oil equivalent a day (MBoed), up 2% from the previous quarter and 18% from a year ago.
According to the Q3 result: “The per-unit cash operating costs in Q3 were 5% below the midpoint of the guidance range, primarily due to lower than forecasted lease and well and transportation costs.” To reduce overall cost, EOG implemented ‘super-zipper’ completion techniques, faster drilling times, lower-cost sand sourcing and procurement of lower-cost water.
EOG has already started to improve its water management in 2021, procuring more of its water from reuse sources every year to cut costs and reduce the group’s environmental footprint. EOG’s CEO, Ezra Yacob, said:
Q4, full-year 2021 production guidance and long-term strategy
EOG expects its crude oil equivalent production in the fourth quarter at 835.5 to be 876.1 thousand barrels of oil equivalent a day (MBoed), and the full-year output at 821.8 MBoed to 832.3 MBoed.
Production from the US accounts for the majority (96%) of the group’s total output, with Trinidad and other international sites contributing 4% to the volume.
The group’s Q4 and 2021 results are scheduled to be released on 25 February.
According to William R. Thomas, EOG’s chairman and former CEO, it plans to be one of “the lowest cost, highest return and lowest emissions producers, playing a significant role in the long-term future of energy.”
As part of the strategy, EOG is targeting a zero routine flaring (a process where oil producers burn excess natural gas released during oil extraction) by 2025. EOG is also aiming to reach net-zero greenhouse gas emissions by 2040.
EOG stock buy, sell or hold?
According to investment guide website The Motley Fool:
Nonetheless, the short-term outlook for EOG stock remains largely positive, with the majority of the analysts surveyed on stock forecast data service TipRanks recommending a ‘strong buy’. Of 17 Wall Street analysts, 15 gave stock ratings of strong buy’, while two recommended ‘hold’. Currently (14 January), the average 12-month EOG stock price target is $117.06. The high price forecast is $130 and the low projection $102.00.
Zack Equity Research wrote on 12 January 2022:
“Shares of the oil and gas company had gained 19.81% over the past month, outpacing the oils-energy sector's gain of 7.1% and the S&P 500’s gain of 0.12% in that time. EOG Resources will be looking to display strength as it nears its next earnings release.”
EOG Resources stock forecast
Despite the rising dividend pay-out and short-term positive outlook, analysts’ EOG share price forecast was mixed.
According to financial market technical analysis and forecasts provider Wallet Investor, the average share price for the next five years is expected to fluctuate and fall below $100, closing at $42.722 in December 2026.
In contrast, a second forecast provider AI Pickup projects EOG stock price to possibly beat its all-time high of $128.94 between 2022 to 2030. According to AI Pickup, EOG stock prices are expected to stay above $100 in the next eight years, potentially peaking at $179.24 in 2031.
Gov Capital expects the EOG stock price to rise to $165.40 in January 2023 and climb to $587.435 by 2026.
Note that analyst forecasts can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
Is EOG resources a good stock to buy?
Most analysts currently hold positive outlooks on EOG stock, with 15 of the 17 analysts surveyed on TipRanks recommending a ‘strong buy’.
However, whether it is a good buy or not will depend on your investing goals and portfolio composition. You should do your own research and never invest what you cannot afford to lose.
Why is EOG Resources stock up?
As EOG is involved in the drilling and extraction of oil and natural gas, its stock prices increased because of higher energy prices.
Will EOG stock go up?
Stock price forecast data held a mixed view on EOG stock prices. Wallet Investor expects the share price to fall below $100 in the next five years. AI Pickup and Gov Capital project value to rise.
Oil and gas producers’ share prices are impacted by supply and demand for the commodity. Lower demand for fossil fuels in the future could affect the stock’s value.
Analysts’ forecasts can be wrong and have been inaccurate in the past. You should do your own research. And never invest what you cannot afford to lose.
Markets in this article