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US Equities · Finance research note

EOG — EOG Resources

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 37.88%
Profit Margins 23.32%
Return on Equity 18.2%
Return on Assets 8.97%
Free Float 0.53B
Dividend Yield 3.08%
Short Int % Utilisation 4.11%

2.2 Growth

Metric Value
Revenue Growth 15.6%
Free Cash Flow 2.86B
EBITDA 6.29 (Ratio)
Enterprise Value 79.17B
EV/Revenue 3.36
EV/EBITDA 6.29

Revenue growth of 15.6% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 29.37%
Risk / Std Dev (Ann.)* 28.50%
1-Year Price Return* 24.02%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $142.61
52-Week Range $101.59 – $151.87
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $22.58B $23.38B
Net income Reported net income $4.98B $6.40B
Total assets Year-end reported balance $51.80B $47.19B
Shareholders’ equity Year-end reported balance $29.83B $29.35B
Net margin Net income ÷ revenue 22.05% 27.39%
Asset turnover Revenue ÷ total assets 0.4360x 0.4954x
Equity multiplier Total assets ÷ shareholders’ equity 1.7363x 1.6076x
ROE Net margin × asset turnover × equity multiplier 16.69% 21.82%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $22.58B
Prior annual revenue $23.38B
EBIT $6.60B
Tax rate 22.00%
NOPAT = EBIT × (1 − tax rate) $5.15B
Forecast start-growth basis -3.40%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $5.15B
Add: depreciation & amortisation $4.46B
Less: capital expenditure -$6.59B
Less/(add): working-capital cash-flow movement -$840.00M
Current unlevered FCFF $2.17B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 -3.40% $4.97B $4.31B -$6.37B -$811.40M $2.10B $2.04B
2 -1.93% $4.87B $4.23B -$5.74B -$795.75M $2.56B $2.35B
3 -0.45% $4.85B $4.21B -$5.21B -$792.15M $3.05B $2.65B
4 1.02% $4.90B $4.25B -$4.76B -$800.26M $3.59B $2.94B
5 2.50% $5.02B $4.36B -$4.36B -$820.27M $4.20B $3.25B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.28
Cost of equity 6.24%
Pre-tax cost of debt 3.49%
WACC 5.90%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $126.66B
Implied terminal EV / EBITDA 11.73x
Terminal value as % of enterprise value 87.79%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $13.23B
Present value of terminal value $95.08B
Indicated enterprise value $108.31B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $108.31B
Less: gross interest-bearing debt $8.41B
Add: cash and equivalents $3.40B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $103.30B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 546,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $148.40
DCF indicative value per share $189.19
Indicative value vs. market price 27.49%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:31:50.583611 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 3.70% 1.33%
Adjusted R² 0.10 0.10
Annualised residual volatility 25.15% 25.09%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.14 (-0.97) -0.18 (-1.07)
Size (SMB) -0.13 (-0.65) -0.21 (-0.96)
Value (HML) 0.72 (4.21) 0.67 (3.16)
Profitability (RMW) NM -0.17 (-0.92)
Investment (CMA) NM 0.22 (0.70)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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