Is EOG Resources Stock Outperforming Its Industry?



EOG Resources stock

Year-to-date, EOG Resources’ (EOG) stock price has fallen from $100.58 to $88.60—a decline of ~12%. To judge the medium-term trend for EOG’s stock price, let’s take a look at its weekly metrics. On a weekly basis, EOG’s stock price is in a moderate downtrend, making a pattern of lower highs and lower lows since the start of 2017. 

On September 7, 2017, EOG stock closed at $88.60, and its 50-week and 200-week moving averages stood at $94.66 and $88.75, respectively. EOG stock is trading below its 50-week and 200-week moving averages. However, EOG’s 50-week moving average stands above its 200-week moving average—a positive technical indication. 

Currently, EOG’s stock price is ~6% below its 50-week moving average. If EOG regains its 50-week moving average, it could be a positive indication for the stock’s future price action.

Article continues below advertisement

EOG lagging crude oil but outperforming natural gas prices

In 2Q17, EOG Resources’ production mix contained ~70% liquids and ~30% natural gas. EOG’s stock price should be more sensitive to the price changes in crude oil (USO) than natural gas (UNG). Since the start of 2017, crude oil (USO) prices fell from $53.72 per barrel to $49.09 per barrel, a decrease of almost 9%.

Natural gas prices have fallen ~20% in 2017. Natural gas prices decreased from $3.73 per MMBtu (million British thermal units) to $2.98 per MMBtu. EOG stock is slightly underperforming crude oil but is widely outperforming natural gas prices in 2017.

EOG Resources’ peers

EOG Resources primarily operates in the Permian Basin. Among EOG’s peers, Energen (EGN), RSP Permian (RSPP), and Pioneer Natural Resources (PXD), which also operate in the Permian Basin, are down ~11%, ~32%, and ~27%, respectively, in 2017.

Year-to-date (or YTD), the SPDR S&P Oil and Gas Exploration & Production ETF (XOP) has underperformed the SPDR S&P 500 ETF (SPY) by a wide margin. XOP has fallen ~25% YTD, and SPY has risen ~11% in fiscal 2017. However, EOG has outperformed XOP by a relatively larger margin.

Series overview

Having analyzed the year-to-date price performance of EOG stock in this article, we’ll study EOG’s key financial metrics throughout this series. Specifically, we’ll study EOG’s earnings per share, revenues, and cash flows. We’ll also take a look at the short interest in the stock, its implied volatility, and Wall Street analysts’ ratings on the stock.

Let’s start with EOG’s most recent earnings.


More From Market Realist