Is EOG Resources (EOG) Among the Top Commodity Producers With the Highest Upside Potential?
On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve's 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions.
'Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia's invasion of Ukraine, and then sinking again,' said Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group. 'In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.'
However, the World Bank's April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic.
The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace.
Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either.
We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential . In this article, we are going to take a look at where EOG Resources, Inc. (NYSE:EOG) stands against the other commodity producer stocks.
Story Continues
Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness.
Top 15 Commodity Producers With the Highest Upside Potential
An oil rig in action in a vast desert, drilling for natural gas.
Our Methodology
To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
EOG Resources, Inc. (NYSE:EOG)
Analysts' Upside Potential as of May 01: 27.15%
EOG Resources, Inc. (NYSE:EOG) is an oil and gas company that owns land in several US shale plays, mostly in the Eagle Ford and Permian Basin. The firm stated that it had 4.7 billion barrels of oil equivalent in net proven reserves by the end of 2024. At a ratio of 69% oil and natural gas liquids to 31% natural gas, net production averaged about 1,062 thousand barrels of oil equivalent per day in 2024. It is ranked eleventh on our list of the Best Commodity Stocks.
EOG Resources, Inc. (NYSE:EOG)'s approach to capital allocation is a little different from that of other US exploration and production companies. Although the integrated majors and their peers have been bitten by the consolidation bug, the firm mostly concentrates on organic exploration activities. It has adopted a capital allocation strategy that prioritizes paying shareholders back while still being open to investing in modest production expansion. Ultimately, it changed course earlier than most to become a low-cost provider in a market that overextended itself during the shale revolution. It is positioned as an outstanding shale company with industry-leading returns on capital due to its impressive asset mix, which includes its dominant position in the Delaware Basin.
EOG Resources, Inc. (NYSE:EOG) reported cash operating expenses of $10.31 boe/d and total production of 1,090 mboe/d. Furthermore, the company utilized about $800 million to repurchase shares in the first quarter of 2025, returning 98% of its available free cash flow. In 2025, management reduced capital spending by $200 million to $6 billion.
Overall, EOG ranks 11th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of EOG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than EOG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
25 minutes ago
- Yahoo
5 Cybersecurity Stocks You Can Buy and Hold for the Next Decade
Breaches have become too costly for companies not to invest in top-tier protection. Cybersecurity comes in several flavors, offering a range of choices for investors. The five stocks below offer broad industry exposure -- and should thrive over time. 10 stocks we like better than Palo Alto Networks › Security has become mission-critical to companies in an increasingly digital and technology-driven world. The consequences of failure are costly. An annual report by International Business Machines estimates that the typical breach can cost companies $4.9 million in damages. Therefore, it should come as no surprise that cybersecurity is a hot topic in the stock market. Research from Roots Analysis estimates that the global cybersecurity market will grow from $215 billion last year to $697 billion by 2035, representing an 11.3% annualized growth rate over the next decade. But don't look to the antivirus programs your parents used on their computers in the late 1990s. Today, a new crop of next-generation security companies is taking over the field. Here are five cybersecurity stocks to consider buying and holding for the next decade. A highly connected world creates security vulnerabilities. That's where Palo Alto Networks (NASDAQ: PANW) comes in. The company specializes in firewall technology, which acts like a security guard on a network, monitoring what is trying to get in, and stopping suspicious actors. The company has expanded into cloud security and integrated artificial intelligence (AI), a common theme on this list, to improve its protection. It is one of the largest dedicated cybersecurity companies and is driving growth by transitioning its business model from selling specific solutions tailored to individual customer needs to a platform strategy. Analysts estimate that Palo Alto Networks will continue to grow its earnings by an average of 20% annually over the long term, as spending across the broader security market increases. It's hard to discuss cutting-edge security without including CrowdStrike Holdings (NASDAQ: CRWD). The company has garnered recognition for its endpoint security, which protects connected devices (endpoints) in a network, such as laptops or smart devices. It has expanded to become a comprehensive security platform with enhanced capabilities, sold to customers as product modules. Cross-selling has driven staggering growth for CrowdStrike. Today, nearly a quarter of its customers use at least eight product modules. And with just $4.4 billion in annual recurring revenue, there is still ample room for growth. The company's success has fetched a lofty price-to-sales ratio (P/S) of 28, but it could be worth nibbling on and adding more aggressively on dips. CrowdStrike is on its way to becoming a substantial business. The internet runs on massive content delivery networks (CDN), and Cloudflare (NYSE: NET) is one of the largest. Beyond powering the internet, it helps secure it by mitigating distributed denial-of-service (DDoS) threats, a type of cyberattack where malicious traffic floods a site, slowing it or crashing it altogether. The company has over 250,000 paying customers, and its network is a great distribution tool for products and services. Its global CDN coverage also makes it a player in edge computing, where companies bring computing resources out of centralized cloud centers to localized locations to improve performance and speed. Think upcoming opportunities like autonomous vehicles and robotics, where secure, fast connections will be crucial for the technology to work at scale. Security technology often flags potential threats that a human analyst then reviews and assesses. SentinelOne (NYSE: S) uses AI to detect and deter cyberthreats autonomously. As a direct competitor to CrowdStrike, it also specializes in endpoint security and has received praise for its high-level technology capabilities. SentinelOne is smaller than its archrival and isn't yet profitable. However, it benefits from the same big-picture growth trends as the others on this list, and its P/S of 6.7 makes it arguably the bargain among this group. Sometimes, you don't need to be the biggest to be successful. The stock could have tremendous long-term upside from here. Cybersecurity isn't among the things investors associate with Microsoft (NASDAQ: MSFT), but make no mistake, the technology giant is a colossal presence in the industry. It builds security products and services into its Windows operating software, protecting millions of Windows computers and devices worldwide. Microsoft is involved with various technology end markets, so this is far more than a cybersecurity investment. The company's exposure to AI, cloud computing, and enterprise software -- as well as Windows and Microsoft 365 productivity software -- makes it a well-rounded bet on the broader technology sector. That's worth holding as an anchor for a growth-focused portfolio. Before you buy stock in Palo Alto Networks, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Palo Alto Networks wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,341!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $874,192!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cloudflare, CrowdStrike, International Business Machines, and Microsoft. The Motley Fool recommends Palo Alto Networks and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 5 Cybersecurity Stocks You Can Buy and Hold for the Next Decade was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
33 minutes ago
- Yahoo
Liberty Energy's (NYSE:LBRT) investors will be pleased with their impressive 110% return over the last five years
It hasn't been the best quarter for Liberty Energy Inc. (NYSE:LBRT) shareholders, since the share price has fallen 11% in that time. But that doesn't change the fact that shareholders have received really good returns over the last five years. In fact, the share price is 101% higher today. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 44% decline over the last twelve months. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the last half decade, Liberty Energy became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.. As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Liberty Energy's TSR for the last 5 years was 110%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence! Liberty Energy shareholders are down 43% for the year (even including dividends), but the market itself is up 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 16%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Liberty Energy better, we need to consider many other factors. Even so, be aware that Liberty Energy is showing 4 warning signs in our investment analysis , and 1 of those is concerning... But note: Liberty Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
33 minutes ago
- Yahoo
Quanex Building Products Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Quanex Building Products Corporation (NYSE:NX) just released its second-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.0% to hit US$452m. Quanex Building Products also reported a statutory profit of US$0.44, which was an impressive 54% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Quanex Building Products after the latest results. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Taking into account the latest results, the most recent consensus for Quanex Building Products from four analysts is for revenues of US$1.85b in 2025. If met, it would imply a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 323% to US$1.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.85b and earnings per share (EPS) of US$1.48 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates. See our latest analysis for Quanex Building Products The consensus price target was unchanged at US$33.75, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Quanex Building Products analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$28.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth. One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Quanex Building Products' growth to accelerate, with the forecast 29% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Quanex Building Products to grow faster than the wider industry. The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Quanex Building Products following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Quanex Building Products going out to 2026, and you can see them free on our platform here.. Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Quanex Building Products (2 can't be ignored) you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
