Since the transaction with Blackstone Credit & Insurance ("BXCI") was announced on Monday, November 25, seven analysts have submitted new price targets for EQT to TipRanks. Most of them increased their price targets, probably more due to the increase in natural gas prices.
The seven new price targets range from $41 to $56 with an average of $49. Only 3 of the 7 rate EQT a BUY. The other 4 rate it a HOLD.
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At the time of this post EQT was trading at $45.14, down a bit because of the dip in natural gas prices this morning.
My guess is that the deal announced on Monday, lowers "Net Marketing Services" revenues, but it also lowers interest expense.
I guessed that Net Marketing Services will be cut in half to ~$250 million and I lowered interest expense. EQT will still have $9 Billion of debt at year-end 2024. My estimated interest expense in 2025 is $550,000.
EQT has a lot of "unknowns" at this point in time, so I am putting more "cushion" into my forecasted Cash Flow from Operations on row 49. Honestly, I am forcing my valuation to be close to TipRanks' current consensus price target, which today is $45.19.
TipRanks: "In the last 3 months, 17 ranked analysts set 12-month price targets for EQT. The average price target among the analysts is $45.19. The 17 price targets range from $34 to $56." < Very wide range of price targets because EQT is company "In Transition", so analysts (including me) have to guess at lots of line number is their forecast model. I am trying to be conservative until EQT provides more detailed guidance for 2025 and I get a better ideal of where natural gas and NGL prices will be in 2025.
EQT is close to a pure "gasser", so the stock price will move up or down with U.S. natural gas prices.
Bottomline: My updated valuation does increase $2 to $45 because of the joint venture announced on Monday.
EQT Corp. (EQT) Valuation Update - Nov 27
EQT Corp. (EQT) Valuation Update - Nov 27
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group