EOG Resources (EOG) Update - June 27

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EOG Resources Inc. (EOG, $93.09, Buy; Target $138.00) by Michael S. Scialla at Stifel

Poised to Beat Street Capex Estimates
E&P stocks have continued to underperform the broader market this year as investors remain skeptical of the industry's fiscal discipline and its ability to generate competitive corporate level returns. Recent high profile articles have also cast doubt on the long-term performance of some companies' shale wells. Slowing global oil demand growth has added to investor's aversion to the sector. EOG's stock has declined 22% over the past 12 months, slightly outperforming our bellwether group average of -27%. We believe management is committed to hitting the midpoint of its 2019 capital expenditure guidance although Street consensus is near the high end of the range. The vast majority of the company's wells are outperforming nearby competitors and are tracking above our type curves. EOG's 2018 cash return on invested capital was second best in our group and highly competitive with other industries.