EOG | Long Setup | Range Rotation from VAL → POC| Jan 8, 2026EOG Resources, Inc.BATS:EOGRisk_Adj_ReturnEOG | Long Setup | Range Rotation from VAL → POC/VAH | Jan 8, 2026 🔹 Thesis Summary Quality E&P with conservative leverage, robust FCF, and expanding inventory (Utica acquisition) trading back at “discount” within a 2-year balance. Expect a rotation from VAL (~103) toward POC (~117) and VAH (~124–126) as oil stabilizes and cash returns stay disciplined. Reuters +2 Yahoo Finance +2 🔹 Trade Setup Bias: Long Entry Zone: 103.5–106.5 (scale-in on dips; VAL + mid-range) Stop Loss: 96.5 (close below = invalidation of value rotation) Take-Profits: • TP1: 111.6 (prior supply shelf) • TP2: 116.9 (POC) • TP3: 124.3–126.0 (VAH / premium) • Max Target: 132–135 if trend extends Indicative R:R from 105 entry ≈ 2.2x to TP3; >3x to Max. 🔹 Narrative & Context Price continues to oscillate inside a broad, well-defined range; current pullback tagged VAL where responsive buyers typically appear. Rotation logic favors a move back through POC toward VAH if value holds. Inventory/Execution: The Encino (Utica) deal adds scale and depth, supporting multi-year volume visibility; recent prints show strong production with cost control and cash returns. Reuters +1 Sector positioning: XOP constituents trade around ~12x P/E; EOG’s forward multiple is nearer ~10x, consistent with a quality-at-reasonable-price setup inside Energy’s defensive factor mix. Digrin +1 🔹 Valuation & Context (Pro Metrics, Framed Simply) Forward P/E ≈ 10.0x vs XOP peers ~12x → Investors pay less per $1 of next-12-month earnings → Signals modest multiple discount for a top-tier operator → Supports long from “discount” to “fair value.” Yahoo Finance +1 FCF Yield (LTM) ≈ 6.9% → Above many large-cap E&Ps → Company generates ample excess cash → Aligns with rotation toward VAH as buybacks/dividends reinforce bid. finbox.com ROE ~19% → Above mid-teens sector norms → Capital efficiency remains strong → Underpins staying power if oil wobbles. GuruFocus Debt/Equity ~0.2–0.27 → Sub-0.3 leverage → Balance sheet conservatism → Clear invalidation and add-on flexibility during volatility. GuruFocus +1 Contextual growth: Production growth was +6–7% YoY around year-end 2024 into 2025; Utica adds medium-term run-rate capacity without stressing the balance sheet. Reuters +1 🔹 Contrarian Angle (Your Edge) Consensus remains cautious after oil’s drawdown; multiples compressed while FCF and inventory depth improved. With price holding the VAL and fundamentals intact, a mechanical range rotation to POC/VAH is underpriced. Path to 124–126, with optionality to ~133 on momentum continuation. 🔹 Risks Further leg lower in WTI/Brent (macro oversupply, demand shocks). Integration and execution risk from the Encino acquisition. Reuters Service-cost inflation or policy/regulatory surprises impacting shale. 🔹 Macro Considerations Track weekly EIA balances, refining runs, and curve structure; a flattening/backwardation recovery would aid the rotation. Watch XOP vs SPX relative trend and DXY; stronger dollar typically pressures crude. Company-specific cadence: capex discipline, dividend/buyback pace, and realized differentials. 🔹 Bottom Line EOG screens slightly cheap on forward earnings with high FCF conversion, strong ROE, and low leverage. The chart points to a value-area rotation long with tight invalidation and clear targets (POC → VAH). This is a professional, rules-based long with defined risk and fundamental support. 🔹 Forward Path If this idea gains traction (10+ likes), I’ll post a follow-up on the weekly structure, updated value areas, and whether to trail stops through POC on a clean acceptance. Like & Follow for structured ideas, not signals. I post high-conviction setups before broader narratives re-rate. Disclaimer: This is not financial advice. Always do your own research. Charts and visuals may include AI enhancements. 🔹 Footnote Forward P/E: Price divided by expected earnings over the next 12 months. Lower = cheaper relative to profits. P/FCF (Price-to-Free-Cash-Flow): Price vs. the cash left after investments. A measure of efficiency. FCF Yield: Free cash flow per share ÷ price per share. Higher = more cash returned for each dollar invested. ROE (Return on Equity): Net income ÷ shareholder equity. Shows management efficiency with investor capital. ROIC (Return on Invested Capital): Net income ÷ all invested capital (equity + debt). A purer profitability gauge. Debt/Equity: Debt divided by equity.