EOG Resources, Inc.

EOG Resources, Inc. (NYSE: EOG) is a crude oil and natural gas independent (non-integrated) company. The Company is primarily involved in the exploration, development, production, and marketing of crude oil, natural gas liquids (NGLs), and natural gas in producing basins in the United States of America, the Republic of Trinidad and Tobago, the People's Republic of China, the Sultanate of Oman, and other international areas from time to time. Its operations focus entirely on crude oil, natural gas liquids, and natural gas exploration and production.

Key Highlights

• The company reported YoY growth of 68.98% in revenue to USD 18.64 billion in FY21 (ended December 31, 2021) compared to USD 11.03 million in FY20.
• EOG reported a net income of USD 4.66 Billion in FY21 in contrast to a net loss of USD 605 million in FY20.
• As of December 31, 2021, the company had cash and cash equivalents of USD 5.21 billion and total debt of USD 5.11 billion.
• EOG’s net margin for FY21 was 25%, significantly higher than the industry median of 11.0%.
• High ROE of 22.0% in FY21, whereas the industry median stood at 11.5%.
• Relatively high liquidity, Current ratio was 2.12x in FY21 vs. the industry median of 1.04x.
• On February 24, 2022, the company declared a quarterly dividend of USD 0.75 per common share, payable on April 29, 2022, to shareholders of record on April 13, 2022.
• Stock is currently trading between its crucial short-term (50-day) and long-term (200-day) SMA support levels.
• The stock is leaning towards the higher end of its 52-week range of USD 60.86 to USD 127.95.

Conclusion: Considering the company’s solid fundamentals, industry above profitability margins, robust liquidity, technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the closing price of USD 111.59, down 0.16%, as of April 26, 2022.

Technical Price Chart (April 26, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of April 26, 2022

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.