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Investing.com - Roth/MKM downgraded EOG Resources (NYSE:EOG) from Buy to Neutral on Wednesday, while reducing its price target to $134.00 from $140.00. The energy giant, with a market capitalization of $67.65 billion and a dividend yield of 3.29%, currently trades at 11.42 times earnings. According to InvestingPro analysis, the stock appears slightly undervalued at current levels.
The research firm cited concerns that global oil prices are approaching a near-term peak, with potential downside risk for oil prices in the second half of 2025.
Roth/MKM highlighted OPEC+ plans to add approximately 2.5 million barrels of oil per day to global markets between April 1 and September 30, which the firm expects will push global oil markets into an oversupplied state.
The downgrade also reflected uncertainty in global oil demand due to the current tariff war, with both factors likely to result in rising global oil inventory levels in 2025.
The firm expressed concerns about EOG Resources’ shorter inventory life compared to peers, its focus on higher-cost emerging plays such as the Utica Shale and PRB, and its involvement in riskier international exploratory plays.
In other recent news, EOG Resources announced the completion of a $3.5 billion debt offering, issuing senior unsecured notes with varying maturities and interest rates. This significant financial move is part of the company’s broader strategy to manage its debt and financial obligations. In addition, UBS has reiterated its Buy rating on EOG Resources, expressing confidence in the company’s production guidance and strategic direction, especially with the upcoming second-quarter update. UBS analysts expect EOG’s production to reach the higher end of its guidance range and are optimistic about the company’s future disclosures regarding its Utica operations.
Furthermore, Stephens has initiated coverage on EOG Resources with an Equal Weight rating, noting the company’s strong balance sheet and projected free cash flow. The firm highlights EOG’s potential for share repurchases and continued capital efficiency improvements. Jefferies has also raised its price target for EOG Resources to $148, maintaining a Buy rating. This adjustment follows discussions about EOG’s Encino acquisition, which is expected to enhance the company’s production capabilities and operational efficiencies.
These developments come as EOG continues to strengthen its position in the oil and gas sector through strategic acquisitions and financial maneuvers. As EOG Resources advances its operations, investors are closely watching for updates on its capital return plans and production strategies.
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