EQT Corp (EQT) Valuation - Jan 5

[dan_s]

I updated my forecast model for EQT this morning, breaking out 2024 by quarter and adding my initial forecast for 2025.

The 2024 revenue forecasts submitted to TipRanks and Reuters (First Call) have a very wide range of $6.5 to $8.3 billion. My revenue forecast for 2024 is $6.75 billion, based on full year realized natural gas prices averaging $2.92/mcf net of cash settlements on their hedges and regional price differentials. < ~35% of their 2024 natural gas is hedged at more than $3.28/mcf.

My updated stock valuation is $47.50, which compares to TipRanks' consensus price target of $45.10. < 14 energy sector analysts have submitted price targets to TipRanks that range from $25.50 to $62.00. I looked at the lowest price target and it looks like there is an error in the model. The next lowest price target is $39.00.

At the time of this post EQT was trading at $38.57.

If you want more exposure to natural gas then you definitely want to take a hard look at EQT:
> It is the largest producer of natural gas in the U.S.
> Current production is ~6 Bcfe per day (95% natural gas, 4.6% NGLs and only 0.4% crude oil).
> My 2024 forecast, based on conservative gas prices, shows the Company generating close to $1.5 Billion of free cash flow this year.
> EQT remains free cash flow positive even if their realize natural gas prices are $2.25/mcf. It has very low cash expenses; LOE and production taxes are only $1.15/mcfe and G&A is only $0.10/mcfe.
> If HH ngas prices move to $4.00 in 2025, EQT's financial results will be STUNNING.

My updated forecast/valuation model for EQT will be posted to the EPG website this afternoon.