EOG: Increasing valuation

[dan_s]

EOG Resources (EOG): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

Based on EOG's increased production guidance, I have increased my Fair Value Estimate by $15/share to $215/share. First Call's Price Target is $192.54, but that should be going up as analysts update their forecast models.

EOG is #1 in the Eagle Ford Shale and in the top 5 in the Bakken/Three Forks. They also have a growing position in the Permian Basin. Using new completion technology, EOG is getting much better production rates from all three areas. This is good news for the entire industry.

My valuation is just 8X CFPS, which is a very low multiple for a company of this quality.

[dan_s]

Just in from Morgan Stanley analyst: "EOG beat and raised guidance, again, off higher liquids production and lower costs. Best execution among large-caps, so far, in an earnings season awarding execution vs. NAV. Notable performance in western EF where IP rates have narrowed the gap with the east. We raise our PT to $205."

Nice to know I'm not the only one seeing this great growth story.