EQT Corp (EQT) Update - Feb 12
Posted: Sat Feb 12, 2022 11:32 am
I have updated my forecast/valuation model for EQT and it will be posted to the EPG website this afternoon. I have lowered my valuation by $3 to $34. EQT closed on Feb 11 at $22.93.
TipRanks: "On 2/11/2022 Truist Securities analyst Neal Dingmann raised the price target on EQT Corp. (NYSE: EQT) to $35.00 (from $31.00) while maintaining a Buy rating." BofA Equity Securities also updated their price target on 2/11/2022 to $32.00 (from $34.00). Both firms rate it a BUY
EQT does have some "Bad Hedges" to work through, but it is going to generate a lot of free cash flow this year, reinstated its dividend of $0.125/quarter and has a $1 Billion stock repurchase plan in place. Operating cash flow should increase from $2.0 Billion in 2021 to close to $3.3 Billion in 2022. The Company's production should be up ~8% year-over-year in 2022, thanks to the Alta Resources acquisition that closed 7/21/2021.
EQT is the largest producer of natural gas in the U.S. at ~5.5 Bcfe per day.
The PV10 value of EQT's proved reserves based on their 3rd party engineering report increased from $3,366 million at 12/31/2021 to $17,281 million at 12/31/2022, increasing the company's PV10 net asset value of just P1 reserves to $21.93/share.
PV10 valuations are based on SEC commodity pricing guidelines:
For 2021, reserves were computed using average first-day-of-the-month closing prices for the prior twelve months of $66.55 per Bbl for West Texas Intermediate (WTI) less regional adjustments of $14.98 per Bbl, or $51.57 per Bbl, and $3.598 per MMBtu for NYMEX less regional adjustments of $1.04 per MMBtu, or $2.694 per Mcf. Regional adjustments were calculated using historical average realized prices received in the Appalachian Basin.
For 2021, NGLs pricing using average first-day-of-the-month closing prices for the prior twelve months for NGLs components, adjusted using the regional component makeup of proved NGLs, resulted in a price of $29.95 per Bbl.
TipRanks: "On 2/11/2022 Truist Securities analyst Neal Dingmann raised the price target on EQT Corp. (NYSE: EQT) to $35.00 (from $31.00) while maintaining a Buy rating." BofA Equity Securities also updated their price target on 2/11/2022 to $32.00 (from $34.00). Both firms rate it a BUY
EQT does have some "Bad Hedges" to work through, but it is going to generate a lot of free cash flow this year, reinstated its dividend of $0.125/quarter and has a $1 Billion stock repurchase plan in place. Operating cash flow should increase from $2.0 Billion in 2021 to close to $3.3 Billion in 2022. The Company's production should be up ~8% year-over-year in 2022, thanks to the Alta Resources acquisition that closed 7/21/2021.
EQT is the largest producer of natural gas in the U.S. at ~5.5 Bcfe per day.
The PV10 value of EQT's proved reserves based on their 3rd party engineering report increased from $3,366 million at 12/31/2021 to $17,281 million at 12/31/2022, increasing the company's PV10 net asset value of just P1 reserves to $21.93/share.
PV10 valuations are based on SEC commodity pricing guidelines:
For 2021, reserves were computed using average first-day-of-the-month closing prices for the prior twelve months of $66.55 per Bbl for West Texas Intermediate (WTI) less regional adjustments of $14.98 per Bbl, or $51.57 per Bbl, and $3.598 per MMBtu for NYMEX less regional adjustments of $1.04 per MMBtu, or $2.694 per Mcf. Regional adjustments were calculated using historical average realized prices received in the Appalachian Basin.
For 2021, NGLs pricing using average first-day-of-the-month closing prices for the prior twelve months for NGLs components, adjusted using the regional component makeup of proved NGLs, resulted in a price of $29.95 per Bbl.