EOG Resources heads into its May 20 earnings report with options traders unusually bullish and short sellers running well below peak pressure — a setup that looks more like anticipation than anxiety.
The most striking signal is in the options market. The put/call ratio has dropped to 0.70, nearly 1.1 standard deviations below its 20-day average of 0.74 and just above the 52-week low of 0.697. That makes this one of the most call-heavy options postures EOG has shown in the past year, arriving precisely as the stock breaks out — up 7.9% on the week and 5% over the past month to close at $140.26. The borrow market reinforces that message. Availability is extraordinarily loose: the lending pool is barely touched, with cost to borrow running at just 0.50% annually. Short interest of roughly 2.9% of free float, while up about 8.7% over the past week, remains well off its late-April high and nowhere near a level that threatens squeeze dynamics.
The bull case rests on capital returns and operational efficiency. EOG returned 100% of free cash flow to shareholders in FY25 — up from 48% in FY21 — and the $5.6 billion Encino acquisition added Utica Shale exposure at a moment when LNG and data center demand narratives are giving gas-weighted producers a fresh look. Factor scores back the momentum story: forward EPS estimates rank in the 91st percentile year-on-year, while EPS momentum over 90 days scores in the 79th percentile. The stock trades at roughly 8.6x trailing earnings and 4.9x EV/EBITDA — not demanding multiples for a company of EOG's quality. Bears, however, point to exactly the inputs those multiples depend on: commodity price volatility can snap profitability quickly, and any sign of well-productivity degradation or capital-efficiency slippage would reframe the Encino deal as dilutive rather than accretive. The analyst community is mixed — the consensus sits at hold with a mean target near $157, implying meaningful upside from current levels, but recent moves have been mostly target trims from the likes of Wells Fargo and Bernstein, even as both maintained their existing ratings. A handful of names nudged targets higher in early May after the prior print.
That prior print is worth noting. EOG fell roughly 7% the day after its last earnings release and shed another 4% over the following five days. The stock has since recovered all of that ground and more — which means the bar for a positive reaction this Wednesday is set against a market that has already repriced the stock higher.
The May 20 report will test whether EOG's operational efficiency and return framework can hold up as investors weigh the Encino integration costs against the commodity backdrop — and whether call-heavy positioning reflects genuine earnings confidence or simply the rally chasing its own tail.
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