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Dril-Quip, Inc. (DRQ) - free report >>
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Here's Why Hold Strategy is Apt for EOG Resources (EOG) Stock
EOG Resources, Inc. (EOG - Free Report) is a leading upstream energy player. For 2024, the firm has witnessed upward earnings estimate revisions over the past seven days. The Zacks Consensus Estimate for this year is pegged at $11.99 per share.
Factors Working in Favor
The price of West Texas Intermediate crude, trading at more than the $70 per barrel mark again, is still highly favorable for upstream operations. EOG Resources, a leading oil and natural gas exploration and production company currently carrying a Zacks Rank #3 (Hold), is thus well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to stockholders. With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, thereby aiding its bottom line.
Risks
Rising lease and well-operating costs are hurting the company’s bottom line. Also, increasing transportation costs are reducing its profit.
Being an exploration and production company, EOG’s business is highly exposed to extreme volatility in oil and gas prices.
Stocks to Consider
Better-ranked players in the energy space include Murphy USA Inc. (MUSA - Free Report) , Sunoco LP (SUN - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) . While Murphy USA and Dril-Quip carry a Zacks Rank #2 (Buy), Sunoco sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past seven days.
Dril-Quip is a leading provider of highly engineered equipment, service and innovative technologies that are being employed in the energy sector.