Yahoo Finance Why You Should Buy EOG Resources (EOG) Ahead of Q1 Earnings
Investors are closely monitoring EOG Resources, Inc. EOG as it prepares to announce first-quarter 2024 earnings on May 2, after market close. Some investors are considering whether to buy shares of this top exploration and production energy company before its earnings release or wait for a more favorable entry opportunity.
Encouraging Price Performance
EOG Resources has proven to be rewarding since the beginning of 2024, gaining 13.9% year to date, surpassing the 11.6% rise of the composite stocks belonging to the Zacks US Oil & Gas Exploration & Production industry. Premium drilling strategy, fortress balance sheet and handsome shareholder returns are among the key reasons that are leading to the outperformance.
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Highly favorable oil prices, as evidenced by the average spot West Texas Intermediate crude oil prices per barrel in January, February and March of $74.15, $77.25, and $81.28, respectively, according to the U.S. Energy Information Administration’s data, are also bolstering the upstream major's price performance, and hence might have backed EOG’s first-quarter earnings.
The Zacks Consensus Estimate for first-quarter earnings per share stands at $2.75, with revenues estimated at $5.9 billion. Notably, our proven model predicts an earnings beat for EOG Resources this time around because the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. EOG has an Earnings ESP of +0.95% and a Zacks Rank #2.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Prime Opportunity for Investing in the Stock
The price chart for EOG Resources may continue to demonstrate resilience, buoyed by the company's diverse portfolio spanning multiple basins and boasting a resource potential of approximately 10 billion barrels of oil equivalent. For decades, the company has relied on its extensive and varied inventory to bolster its cash flows.
Regarding costs, the prominent exploration and production company is observing significantly lower well expenses compared to the industry average, thanks to its advanced drilling methods. Moreover, the company noted that its breakeven oil price is notably lower than the industry average. Developments in these fronts are helping the company to continue to generate significant returns for investors.
In times of uncertainty and challenging market conditions, unlike numerous other energy companies, EOG can rely on its robust balance sheet to navigate through volatile and uncertain market environments. Remarkably, the company's debt-to-capitalization ratio is just 11.9%, considerably below the industry average of 29.3%.
Thus, a high-quality multi-basin resource base, cost-efficient business model and strong balance sheet are backing EOG’s sustainable dividend payments. With a track record of stable and increasing dividends spanning 26 years, EOG demonstrates its commitment to delivering shareholder returns across different price cycles.
Clearly, the favorable developments are benefiting the top upstream energy player and presenting an excellent opportunity to invest in the stock. Also, the current Enterprise Value/Earnings before Interest Tax Depreciation and Amortization ratio of 6.21X over the past 12 months trades at a discount compared to the Zacks US Oil & Gas Exploration & Production industry average of 8.52X.
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Closing Thoughts
EOG prioritizes positioning itself as one of the top oil and gas producers in terms of high returns, low costs and minimal emissions, playing a pivotal role in shaping the future of energy. Hence, it is a good idea for investors to buy EOG before May 2.
Other Stocks to Consider
Here are some other firms that you may want to consider, as these, too, have the right combination of elements to post an earnings beat in the upcoming quarterly reports:
MPLX LP MPLX currently has an Earnings ESP of +3.78% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The partnership is scheduled to release first-quarter earnings on Apr 30. The Zacks Consensus Estimate for MPLX’s earnings is pegged at 99 cents per share, suggesting an 8.8% increase from the year-ago figure.
Pioneer Natural Resources Company PXD currently has an Earnings ESP of +1.31% and a Zacks Rank #2.
Pioneer is scheduled to release first-quarter earnings on May 2. The Zacks Consensus Estimate for PXD’s earnings is pegged at $5.01 per share, suggesting a 3.8% decline from the year-ago figure.
PBF Energy Inc. PBF has an Earnings ESP of +14.10% and is a Zacks #2 Ranked player at present.
PBF Energy is scheduled to release first-quarter results on May 2. The Zacks Consensus Estimate for PBF Energy’s earnings is pegged at 55 cents per share, suggesting a massive 80% decline year-over-year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
MPLX LP (MPLX) : Free Stock Analysis Report
PBF Energy Inc. (PBF) : Free Stock Analysis Report