EQT Corp (EQT) Valuation Update - Feb 17
Posted: Fri Feb 17, 2023 12:13 pm
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
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