EQT Corp (EQT) Update - March 17
Posted: Thu Mar 17, 2022 2:06 pm
I have updated my forecast/valuation model for EQT and I have increased by current valuation by $3 to $38.
EQT is the largest producer of natural gas (over 5.2 Bcf per day) in the U.S. and it also produces about 50,000 bpd of NGLs
Despite having over 65% of this year's ngas hedged at prices way below the current strip, EQT's operating cash flow should increase year-over-year by $1.4 billion to $3.4 billion. FCF should be over $1.8 Billion.
TipRanks: "On 3/14/2022 Nitin Kumar CFA from Wells Fargo maintained a Buy rating on EQT, with a price target of $37.00."
In my opinion, the U.S. natural gas market continues to move through a STRUCTURAL CHANGE that will keep natural gas and NGL prices high and could push them MUCH HIGHER. Keep in mind that 6 mcf of natural gas has about the same energy content of 1 barrel of oil. So, the energy equivalent price of ngas is over $16/MMBtu. I am old enough to remember when natural gas did sell for over $12/mcf. I doubt we see that price again soon, but we've recently seen gas trading for over $6.30/MMBtu and if LNG exports stay near U.S. export capacity all year, I think gas may move firmly into a range over $6.00 in Q4.
EQT is the largest producer of natural gas (over 5.2 Bcf per day) in the U.S. and it also produces about 50,000 bpd of NGLs
Despite having over 65% of this year's ngas hedged at prices way below the current strip, EQT's operating cash flow should increase year-over-year by $1.4 billion to $3.4 billion. FCF should be over $1.8 Billion.
TipRanks: "On 3/14/2022 Nitin Kumar CFA from Wells Fargo maintained a Buy rating on EQT, with a price target of $37.00."
In my opinion, the U.S. natural gas market continues to move through a STRUCTURAL CHANGE that will keep natural gas and NGL prices high and could push them MUCH HIGHER. Keep in mind that 6 mcf of natural gas has about the same energy content of 1 barrel of oil. So, the energy equivalent price of ngas is over $16/MMBtu. I am old enough to remember when natural gas did sell for over $12/mcf. I doubt we see that price again soon, but we've recently seen gas trading for over $6.30/MMBtu and if LNG exports stay near U.S. export capacity all year, I think gas may move firmly into a range over $6.00 in Q4.