Section 1: Company Overview and Fundamentals

1.1 Company Overview:

EOG Resources, Inc. (NYSE: EOG) is amongst the largest crude oil and natural gas exploration and production companies in the United States. It has proved reserves in the United States and Trinidad. The company’s total estimated net proved reserves as of 31 December 2021 stood at 3,747 million barrels of oil equivalent (MMBoe), with 99% of these reserves are situated in the United States.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart below, which together forms ~43.20% of the total shareholding.

 1.4 Key Metrics:

The company continues to witness improvement in EBITDA margin to reach 52.1% in 2QFY22 from 36.0% in 1QFY22 and 50.8% in 2QFY21. Notably, the company’s ROE also improved significantly to 10.2% in 2QFY22 from 1.8% in 1QFY22 and 4.4% in 2QFY21.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

2.2 Insights of 1HFY22:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 23, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.