It's been a sad week for EOG Resources, Inc. (NYSE:EOG), who've watched their investment drop 15% to US$63.26 in the week since the company reported its yearly result. It was a credible result overall, with revenues of US$17b and statutory earnings per share of US$4.71 both in line with analyst estimates, showing that EOG Resources is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the latest consensus from EOG Resources's 14 analysts is for revenues of US$19.2b in 2020, which would reflect a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to accumulate 3.6% to US$4.91. Before this earnings report, analysts had been forecasting revenues of US$18.4b and earnings per share (EPS) of US$5.62 in 2020. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The consensus price target was unchanged at US$99.62, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on EOG Resources, with the most bullish analyst valuing it at US$127 and the most bearish at US$77.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Further, we can compare these estimates to past performance, and see how EOG Resources forecasts compare to the wider market's forecast performance. We can infer from the latest estimates that analysts are expecting a continuation of EOG Resources's historical trends, as next year's forecast 10% revenue growth is roughly in line with 11% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 5.0% next year. So it's pretty clear that EOG Resources is forecast to grow substantially faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for EOG Resources. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. The consensus price target held steady at US$99.62, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for EOG Resources going out to 2023, and you can see them free on our platform here..
It might also be worth considering whether EOG Resources's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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