Yahoo Finance EOG Resources, Inc. Just Missed Earnings And Its EPS Looked Sad - But Analysts Have Updated Their Models
It's been a pretty great week for EOG Resources, Inc. (NYSE:EOG) shareholders, with its shares surging 15% to US$51.45 in the week since its latest first-quarter results. Sales came in at US$4.7b, beating expectations by a remarkable 23%, while statutory earnings per share (EPS) were US$0.02, missing estimates by an equally remarkable 97%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for EOG Resources
Taking into account the latest results, the current consensus, from the 15 analysts covering EOG Resources, is for revenues of US$14.4b in 2020, which would reflect an uneasy 19% reduction in EOG Resources' sales over the past 12 months. Statutory earnings per share are expected to crater 88% to US$0.42 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$13.4b and earnings per share (EPS) of US$0.40 in 2020. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$57.30, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on EOG Resources, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$41.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 19%, a significant reduction from annual growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.6% next year. It's pretty clear that EOG Resources' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EOG Resources' earnings potential next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for EOG Resources going out to 2022, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for EOG Resources you should know about.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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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