Monday - Mizuho has adjusted the price target for EOG Resources (NYSE:EOG), an energy company, to $140 from $138, while retaining a Buy rating on the stock. The firm anticipates a strong beginning to the fiscal year 2024 for EOG, with oil production averaging around 487 thousand barrels per day, surpassing the mid-point expectation. The company's free cash flow (FCF) is projected to align with the consensus at $1.1 billion.
EOG Resources ended the year 2023 with a net cash position of $900 million, directing attention to the return of cash to shareholders. In light of the current weak natural gas prices, EOG may postpone capital expenditures in 2024 that are aimed at more natural gas-centric areas, such as the Dorado play.
InvestingPro Insights
Mizuho's positive adjustment of EOG Resources' price target is supported by several key financial metrics and market insights. According to InvestingPro data, EOG Resources boasts a robust market capitalization of $77.82 billion and a favorable price-to-earnings (P/E) ratio of 10.32, indicating that the stock may be reasonably valued relative to its earnings. The company's strong gross profit margin of 62.26% over the last twelve months as of Q4 2023 highlights efficient operations, while a high return on assets of 17.82% suggests effective use of company resources.
InvestingPro Tips further enrich this outlook, noting that EOG Resources holds more cash than debt on its balance sheet, a sign of financial stability. Additionally, the stock's low price volatility and the fact that it is trading near its 52-week high, with a strong return over the last three months, could be appealing to investors looking for consistent performance. For those interested in dividends, EOG has maintained dividend payments for an impressive 35 consecutive years. With analysts predicting profitability for the year and a profitable track record over the last twelve months, EOG Resources appears to be on solid footing.
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