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On Thursday, Raymond (NSE:RYMD) James adjusted its financial outlook for EOG Resources (NYSE:EOG), reducing the stock’s price target from $175.00 to $154.00. Despite the decrease in target price, the firm has maintained its Strong Buy rating on the shares. According to InvestingPro data, EOG demonstrates robust financial health with an overall score of "GREAT" and maintains strong fundamentals with a P/E ratio of 11.4x. The company’s stock has historically shown low price volatility, making it an attractive option for stability-focused investors.
The revision follows EOG Resources’ fourth-quarter results and the current trends in commodity pricing. According to Raymond James, EOG’s first-quarter production is expected to tally at 1,090 thousand barrels of oil equivalent per day (mboe/d), aligning with market expectations and touching the upper limit of the company’s own guidance. The forecast for oil production stands at 502 thousand barrels per day (mb/d), which is consistent with both the guidance provided by EOG Resources and consensus estimates. With a market capitalization of $71.6 billion and a track record of maintaining dividend payments for 36 consecutive years, EOG has demonstrated remarkable stability. For deeper insights into EOG’s financial metrics and growth potential, InvestingPro subscribers can access comprehensive analysis and additional ProTips.
The first-quarter capital expenditure (capex) prediction by Raymond James is slightly above the Street’s anticipation at $1.53 billion compared to $1.515 billion, yet it hovers near the guidance midpoint of $1.525 billion. The firm also forecasts a modest increase in capital spending for the first half of 2025, with the second quarter likely seeing the highest expenditure.
For the full year of 2025, Raymond James expects EOG Resources to maintain a capex of $6.2 billion, which is in agreement with both the company’s guidance and Street estimates. The anticipated production for the year is projected at 1,122 mboe/d, with a composition of 45% oil and 32% gas, and oil volumes around 507 mb/d, figures that are considered to be in line with expectations.
The firm also anticipates that EOG Resources will continue its share buyback activities throughout the first quarter. The adjustment in the price target to $154.00 per share is attributed to a weaker oil price environment since the firm’s last update. Despite the reduced target, Raymond James reaffirms its strong conviction in the stock’s performance potential. InvestingPro analysis indicates that EOG holds more cash than debt on its balance sheet and maintains sufficient cash flows to cover interest payments, highlighting its financial strength. The stock is currently trading near its Fair Value, suggesting balanced market pricing.
In other recent news, EOG Resources reported its fourth-quarter 2024 earnings, surpassing expectations with an earnings per share (EPS) of $2.74, while revenue fell short at $5.6 billion against a forecast of $5.88 billion. UBS analysts, led by Josh Silverstein, adjusted EOG’s stock outlook, reducing the price target from $165 to $160 but maintained a Buy rating, citing mixed financial performance and first-quarter 2025 projections that missed expectations. Despite these challenges, UBS highlighted EOG’s strong balance sheet and asset base, projecting improved capital efficiency in 2025. Mizuho (NYSE:MFG) Securities downgraded EOG Resources’ stock rating from Outperform to Neutral, with a revised price target of $140, reflecting a decrease in anticipated cash margins and revised estimates for reserves. Meanwhile, Benchmark analyst Subash Chandra maintained a hold rating on EOG Resources, projecting earnings per share and EBITDA closely aligned with market consensus. These developments reflect a cautious yet stable outlook for EOG Resources as the company navigates financial and operational challenges.
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