Sep. 10 at 6:11 AM
$EOG still looks like one of the higher-quality U.S. E&P names, but upside may be getting limited near current levels.
Q2 production rose ~24% to 1.4M BOE/day, while net income more than doubled to
$2.72B. Balance-sheet quality also remains better than many peers despite higher debt after the Encino deal.
My issue is valuation vs the oil cycle.
We see upside becoming limited around
$147.30. As long as oil stays above
$80 through FY2026 earnings, a consolidation zone around
$134.69 looks reasonable.
If WTI eventually normalizes toward
$65–
$70, earnings and the multiple could compress together.
My view: strong business, but not a great chase. At this point, risk/reward looks better on a pullback than on another oil-driven spike.
