EQT Corp. (EQT) Valuation Update - April 25
Posted: Fri Apr 25, 2025 12:31 pm
I have finished updating my forecast/valuation model for EQT for Q1 2025 results and their updated guidance.
At the time of this post EQT was trading for $50.12. My updated current valuation is $65.00.
EQT is a large-cap "Gasser" and it is the most heavily weighted to natural gas (~94% of production).
> EQT's Q1 realized natural gas price, net of differential and cash settlements on their hedges was $3.66/mcf. < They actually paid out $92 million for cash settlements on their hedges in Q1.
> For the remainder of 2025, I am forecasting realized natural gas prices of $3.19 for Q2, $3.61 for Q3 and $4.28 for Q4.
> ~65% of their Q2 2025 natural gas is hedged at $3.11 to $3.48, so the recent dip in gas prices won't have much impact on Q2 results.
> Over 50% of their Q3 and Q4 gas is hedged.
> EQT is going to generate over $3 billion of free cash flow this year. < Over $5/share.
TipRanks: "In the last 3 months, 20 ranked analysts set 12-month price targets for EQT. The average price target among the analysts is $57.39." The 5 most recent updates since EQT announced Q1 results range from $46 to $74.
EIA's current forecast for U.S. natural gas price for 2026 is $4.60/MMBtu. If gas price do average that high next year, EQT should generate close to $5 billion ($12.50/share) of free cash flow from operations next year and some of the Wall Street Gang's price targets will go over $100.
If you are bullish on U.S. natural gas prices, EQT should be one of your Core Holdings. Downside risk is minimal due to EQT's hedging program.
At the time of this post EQT was trading for $50.12. My updated current valuation is $65.00.
EQT is a large-cap "Gasser" and it is the most heavily weighted to natural gas (~94% of production).
> EQT's Q1 realized natural gas price, net of differential and cash settlements on their hedges was $3.66/mcf. < They actually paid out $92 million for cash settlements on their hedges in Q1.
> For the remainder of 2025, I am forecasting realized natural gas prices of $3.19 for Q2, $3.61 for Q3 and $4.28 for Q4.
> ~65% of their Q2 2025 natural gas is hedged at $3.11 to $3.48, so the recent dip in gas prices won't have much impact on Q2 results.
> Over 50% of their Q3 and Q4 gas is hedged.
> EQT is going to generate over $3 billion of free cash flow this year. < Over $5/share.
TipRanks: "In the last 3 months, 20 ranked analysts set 12-month price targets for EQT. The average price target among the analysts is $57.39." The 5 most recent updates since EQT announced Q1 results range from $46 to $74.
EIA's current forecast for U.S. natural gas price for 2026 is $4.60/MMBtu. If gas price do average that high next year, EQT should generate close to $5 billion ($12.50/share) of free cash flow from operations next year and some of the Wall Street Gang's price targets will go over $100.
If you are bullish on U.S. natural gas prices, EQT should be one of your Core Holdings. Downside risk is minimal due to EQT's hedging program.