Ticonderoga Downgrades EOG Resources (EOG) to Neutral; Strong Run Pushes Valuation Back to a Premium
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Price: $149.48 --0%
Rating Summary:
29 Buy, 25 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 7 | New: 9
Rating Summary:
29 Buy, 25 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 7 | New: 9
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Ticonderoga downgraded EOG Resources (NYSE: EOG) from Buy to Neutral.
Ticonderoga analyst says, "Shares of EOG have gained 31% year-to-date, double the increase of the S&P E&P SuperComposite - EOG came into 2011 trading at only 77% of NAV and at a slight discount to peers, which were trading at 80% of NAV at the median. This discount stemmed from a period of underperformance during 4Q’10 after EOG lowered its production guidance and had to scale back 2011 and 2012 expectations due to higher debt, lower natural gas prices, and operational delays. After digesting the bad news, we believe the market is now pricing the shares close to fair value, as EOG’s stock is currently trading at 98% of our $122 NAV, a considerable premium to the 85% P/NAV valuation for the group."
"While we believe EOG’s premium to the group is justified given the high quality of the asset base and the company’s strong operational track record, we don’t expect the shares to continue to outperform given current valuation levels."
For more ratings news on EOG Resources click here and for the rating history of EOG Resources click here.
Shares of EOG Resources closed at $119.67 yesterday.
Ticonderoga analyst says, "Shares of EOG have gained 31% year-to-date, double the increase of the S&P E&P SuperComposite - EOG came into 2011 trading at only 77% of NAV and at a slight discount to peers, which were trading at 80% of NAV at the median. This discount stemmed from a period of underperformance during 4Q’10 after EOG lowered its production guidance and had to scale back 2011 and 2012 expectations due to higher debt, lower natural gas prices, and operational delays. After digesting the bad news, we believe the market is now pricing the shares close to fair value, as EOG’s stock is currently trading at 98% of our $122 NAV, a considerable premium to the 85% P/NAV valuation for the group."
"While we believe EOG’s premium to the group is justified given the high quality of the asset base and the company’s strong operational track record, we don’t expect the shares to continue to outperform given current valuation levels."
For more ratings news on EOG Resources click here and for the rating history of EOG Resources click here.
Shares of EOG Resources closed at $119.67 yesterday.
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