Is EOG Resources Stock Undervalued?

Core Viewpoint - EOG Resources is currently fairly priced at around $118 per share, with a capital-intensive and cyclical business model that is more influenced by macroeconomic factors than profitability [1] Financial Performance - In Q2, EOG's revenues increased by 8% year-over-year to $6 billion, while net income rose approximately 10% to $2 billion, equating to $2.97 per share [3] - The company generated $2.6 billion in free cash flow in the first half of 2024, funding a cash return to shareholders of $2.5 billion [3] - EOG's average crude oil price increased by about 10% to $82.69 per barrel, and average natural gas liquids price grew by 13% to $245,000 per barrel of oil equivalent per day [3] Future Projections - EOG's revenues are forecasted to reach $19.2 billion for fiscal year 2024, representing an 11% year-over-year increase [4] - Expected earnings per share (EPS) for 2024 is projected at $12.17, with a revised valuation of approximately $122 per share based on a 10.1x P/E multiple [4] Stock Performance Comparison - EOG's stock has shown volatility over the past three years, with annual returns of 89% in 2021, 57% in 2022, and -2% in 2023, contrasting with the more stable performance of the Trefis High Quality Portfolio [2][3]