EQT Corp (EQT) Valuation Update - Feb 17

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

EQT Corp (EQT) Valuation Update - Feb 17

Post by dan_s »

I have updated my forecast/valuation model for EQT and it will be posted to the EPG website this afternoon.

At the time of this post EQT was trading at $31.36.

I have lowered my current valuation by $5 to $45/share, just because I am lowering the natural gas prices in all of my forecast model.

Things to note:
> EQT is the largest natural gas producer in the U.S. but it is still a "Price Taker".
> Thanks to Bad Hedges, EQT's realized natural gas price including cash settlements on hedges and regional differentials was only $3.00/mcf in 2022.
> The Company's hedge book is in much better shape this year with more than 50% of their gas now hedged above the current strip prices. Their hedges are collars with high ceilings.
> Adjusted operating cash flow was $3,366 million ($9.21/share) in 2022 and it should be slightly higher this year but lower on a per-share basis to approximately $8.16 per share because they will be issuing 55 million shares for the Tug Hill & XcL Acquisitions that are expected to close in March. < TipRanks' operating cash flow forecast for 2023 is $9.43 per share.
> For those of you who are long-term bullish on natural gas prices like me, EQT's PV10 Net Asset Value based on SEC pricing rules was $89.29 per share on 12-31-2022.

TipRanks: "In the last 3 months, 15 ranked analysts set 12-month price targets for EQT. The average price target among the analysts is $48.60."
Five highly respected analysts have submitted updated price targets since the company released its Q4 results:
Truist Financial 2/17/2023 >> $41.00 BUY
Wolfe Research 2/17/2023 >> $51.00 BUY
Siebert W S 2/16/2023 >> $31.00 HOLD
Bank of America 2/16/2023 >> $67.00 BUY
Evercore ISI 2/15/2023 >> $55.00 BUY
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: EQT Corp (EQT) Valuation Update - Feb 17

Post by dan_s »

Note from Neal Dingmann at Truist Financial

EQT Corporation (EQT, $31.83, Buy) - Flex Plan and Efficient Ops Provides Optimal Activity
- EQT laid out 2023 plans that can quickly adjust to the continued volatile gas tape while also likely to generate well over $2.5B of FCF. We not only anticipate the quarterly dividend to remain relatively flat, but we also forecast continued notable prudent debt repayments and opportunistic share buybacks, which have already been seen YTD with ~6mm shares repurchased. The company suggested a 2-4 rig plan pre-Tug Hill, which we believe makes sense given current prices and limited takeaway. Nonetheless, we have lowered our price target to $41 from $43. - Neal Dingmann
Dan Steffens
Energy Prospectus Group
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