EOG Resources (EOG) Update - Sept 21

[dan_s]

At the time of this post EOG is trading for $72.61. I have updated my current valuation to $122.00. EOG has a lot of unhedged natural gas and NGLs, plus they have an outstanding marketing group that knows how to take advantage of high spot market prices in the U.S. and the international market. For example, EOG's realized natural gas prices was $5.12/mcf in Q1 2021 when most companies were getting half that price.

TipRanks: "In the last 3 months, 15 ranked analysts set 12-month price targets for EOG. The average price target among the analysts is $101.36." < This price target is based on much lower natural gas and NGL prices than we have today.

EOG is now on pace to generate over $8.6 Billion of operating cash flow and over $4.5 Billion of free cash flow THIS YEAR.

In my opinion, EOG trading at less than 5X operating cash flow per share is INSANE. This stock is "Core of the Core" quality.

Investors Business Daily on 9-17-2021
"If you're paying up at the pump — you know why energy stocks are tops in the S&P 500 this year. But don't worry, there's still time to make money on the sector, analysts say. S&P 500 energy companies, like Diamondback Energy (FANG), EOG Resources (EOG) and Apache (APA) are all up huge this year. But even so, they join six S&P 500 energy stocks that still have 30% or more upside in the next 12 months, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. "Energy stocks are some of the most heavily covered by analysts. The sector also has the highest percentage of buy ratings," says Bespoke Investment Group."

From the same article:
FANG Is The New Fang
Analysts' hopes are highest for Diamondback Energy, which trades by the symbol FANG. They think shares of the Midland, Texas-based oil and gas company can still rise more than 40% until hitting the 12-month price target of 80.07. What's impressive, in addition to the stock's 98 IBD Composite Rating, is that it's already up more than 65% this year. So analysts' upside is on top of a big move already. Why such bullishness? Analysts think Diamondback Energy's profit will boom more than 236% in 2021 to $10.22 a share. And next year, analysts think Diamondback Energy's earnings per share will jump another 30%.

Picking Up Other Energy Gems
Other top picks by analysts are also strong performers, already, too. This shows many of the leading energy firms are seen pulling further ahead. Another favorite is EOG Resources, which sports a 95 Composite Rating, in part, by rallying more than 48% this year already. Analysts think EOG's profit will jump more than 400% in 2021, followed by a nearly 4% profit jump in 2022. And that's enough to help push the stock up another 33%, analysts say.