Utility Tuesday: Record Orders, $2.25B Debt Raises, and a 60% Revenue Spike the Market Ignored

This Week's Setup

Fear & Greed sits at 64, greed territory, but energy and midstream names trade like the commodity super-cycle never happened.

The S&P 500 CAPE at 38.9 keeps the broad market priced for perfection while exploration and production companies with 15% returns on capital trade at single-digit EV/EBITDA multiples and show insider selling that tells you nothing about the commodity outlook.

SpaceX's emerging power demand (EQT made the news on it this week) and a $2.25 billion MPLX debt offering signal infrastructure buildout in a sector the market has left for dead.

Quick Scan

The 8 Names

1. EOG Resources, Inc. (EOG)

EV/EBITDA: 6.14 | Interest coverage: 28.1× | 52w drawdown: -7.9%

The setup here is 15.2% ROIC at a 6.14× EV/EBITDA multiple with 63.4% gross margins, metrics that belong in software, not oil and gas. Bernstein and JPMorgan both raised targets this week (to $156 and $151 respectively), bracketing the consensus $160 target that implies 14.6% upside from current levels.

Revenue fell 3.4% year-over-year, the kind of top-line contraction that typically signals either commodity price weakness or production discipline. The 7.3% earnings yield sits 2.6 points above the normalized 10-year average, suggesting either the market prices in structural decline or the multiple compresses further if crude stays range-bound.

Insider activity in the last 30 days shows Form 4 filings from C. Christopher Gaut, Charles R. Crisp, and Janet F. Clark on August 4, all sell transactions. The net share count over six months is negative 14,343 shares with 100% of activity on the sell side, zero buys, insider_pct_buy at 0.0000. When insiders sell in a name analysts are raising, you read it as compensation event noise, not thesis breakdown.

2. EQT Corporation (EQT)

EV/EBITDA: 5.73 | Interest coverage: 7.8× | 52w drawdown: -22.6%

Revenue jumped 60% year-over-year while the stock sits 22.6% off its 52-week high, a valuation dislocation that hands you an 8.6% FCF yield and a 10× earnings multiple. Analysts see 32.6% upside to the $70 target, the widest implied gain in this week's list. SpaceX's power demand hit the news cycle this week with EQT mentioned as a "clear positive," and natural gas infrastructure buildout is the only commodity story that survives the energy bear case.

Curtis Barry, Martha Willis, and Jeffrey R. Kiesel all filed Form 4 transactions on July 22, insider activity that aligns with the company's strongest revenue growth quarter in years. The 5.73× EV/EBITDA multiple prices in structural skepticism that the top-line print contradicts.

Net debt to EBITDA sits at 0.74×, the highest leverage ratio in this week's screen, and interest coverage of 7.8× is serviceable but not fortress-grade. If natural gas prices roll over or the AI power narrative fades, this multiple re-rates lower before the fundamental case catches up.

3. ConocoPhillips (COP)

EV/EBITDA: 6.76 | Interest coverage: 11.3× | 52w drawdown: -11.0%

The company delivers 13.5% ROIC with an 11% drawdown entry point and 18% analyst upside to the $143 consensus target. Susquehanna raised its price target to $161 from $155 this week while Goldman lifted its target to $146 from $140, both keeping buy-equivalent ratings. The 2.8% dividend yield and 4.9% FCF yield together frame a 7.7% cash-return profile that doesn't require commodity-price heroics.

The normalized 10-year earnings yield sits at 0.18%, effectively zero, which signals either the last decade was an earnings trough or the current multiple reflects peak-cycle assumptions. Revenue grew 7.7% year-over-year, but gross margin contracted to 25.1%, the kind of operating leverage reversal that happens when input costs rise faster than realized prices.

Silvina Vatnick filed two Form 4 transactions on July 27 and Ricardo Jaramillo Mejia filed on July 17, insider activity that adds names but no dollar amounts to the recent transaction log. The 20.5× P/E sits above the sector median, a premium you pay for the balance sheet (net debt to EBITDA at 0.73×) and the buyback capacity the 4.9% FCF yield affords.

4. Valero Energy Corporation (VLO)

EV/EBITDA: 9.11 | Interest coverage: 6.4× | 52w drawdown: +17.2%

The stock trades 17.2% above its 52-week low, effectively at a new high, with a 5.5% FCF yield that funds the 1.6% dividend and leaves room for buybacks. ROIC of 9.5% sits below the energy screen median, but refining margins in Q2 held up better than the analyst consensus expected, a setup that explains why the stock outperformed the sector year-to-date.

Analysts see negative 16.1% downside to the $259 target from the current $309 price, the only name this week where the Street thinks you are paying too much. The 22.6× P/E and 9.1× EV/EBITDA multiples price in margin durability that the -5.5% revenue decline and 4.4% gross margin don't support. When valuation implies perfection and the top line contracts, the risk-reward skews asymmetrically lower.

Interest coverage of 6.4× is the second-lowest in this week's screen after EQT, and net debt to EBITDA sits at 0.63×, workable but not stress-tested. If crack spreads compress or demand softens, this multiple compresses faster than the earnings decline because the market already priced in the good news.

5. MPLX LP (MPLX)

EV/EBITDA: 13.45 | Interest coverage: 5.8× | 52w drawdown: -2.4%

The 7.4% dividend yield and 6.9% FCF yield together deliver a 14.3% gross cash return profile with 19.2% ROIC, the kind of capital efficiency that justifies the 13.5× EV/EBITDA multiple in a midstream MLP structure. The company priced a $2.25 billion senior notes offering this week, new debt that funds either acquisition or distribution growth, both of which the market reads as bullish when the stock sits 2.4% off its 52-week high.

Garry L. Peiffer, Frank M. Semple, and Ray N. Walker Jr. all filed Form 4 transactions on August 5, insider activity that clusters around the debt pricing announcement. The offering itself signals management confidence that cash flows can service incremental leverage, a read that aligns with the 5.2% year-over-year revenue growth and the 43.6% gross margin.

Net debt to EBITDA sits at 4.11×, the highest leverage ratio in this week's entire screen, a structural feature of MLP tax treatment but a risk flag if interest rates stay elevated or distribution coverage tightens. Interest coverage of 5.8× is the lowest in the list, meaning the margin for error on cash flow volatility is thin.