EOG Resources’ stock price action
Falling crude oil (UCO) and natural gas (UGAZ) prices over the last two years have led to a falling trend in the entire upstream sector. EOG Resources (EOG) is no exception. But since January 2016, as you can see in the graph below, EOG stock has been in a new uptrend. It’s clearly making a pattern of higher highs and higher lows.
EOG stock performance leading up to 1Q16 earnings
Recently, EOG Resources has shown less relative strength compared to other crude oil and natural gas producers. In the last three months, EOG stock has risen ~41%. Compare this with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which rose ~56% during the same period. XOP invests at least 80% of its total assets in oil and gas exploration companies. The Direxion Daily S&P Oil & Gas Exploration & Production Bull 3x Shares (GUSH) is a leveraged ETF that invests in oil and gas exploration and production companies.
Even for 2016, EOG stock is underperforming other upstream companies. EOG has risen ~20%. Other oil and gas producers such as SM Energy (SM), WPX Energy (WPX), and Pioneer Natural Resources (PXD) have risen ~67%, ~61%, and ~35%, respectively.
EOG stock price behavior after past earnings results
EOG reported its 4Q15 earnings after the Market closed on February 25, 2016. In 4Q15, excluding the one-time items, EOG reported a loss of $0.27 per share, which was $0.05 better than the consensus of a loss of $0.32 per share. Following the earnings release, despite better-than-expected earnings, EOG stock fell ~5% in three sessions.
For 3Q15 earnings, excluding the one-time items, EOG reported a profit of $0.02 per share. That was $0.32 better than the consensus of a loss of $0.30 per share. Following the earnings release, despite a huge beat on earnings, EOG stock fell ~6% in five sessions.
The stock had a similar reaction after the company’s 2Q15 and 1Q15 earnings releases. EOG stock fell ~4% in one session and ~11% in 12 sessions, respectively. In 2Q15 and 1Q15, EOG beat consensus earnings estimates by $0.18 per share and $0.03 per share, respectively.
EOG’s 4Q14 post-earnings reaction was also negative, mainly due to a worse-than-consensus earnings report.