EQT Corporation (NYSE:EQT) faces a downgrade to Neutral from Buy by Mizuho Securities analyst Nitin Kumar, with a price target decrease to $39 from $46. The downgrade is based on factors such as FY23 reserves, 2024 guidance, and the planned merger with Equitrans Midstream Corporation (NYSE:ETRN).
The merger between EQT and Equitrans will create a combined enterprise value exceeding $35 billion. However, recent financial performance, including fourth-quarter revenue of $1.549 billion falling below expectations and adjusted EPS at $0.48 below consensus estimates, contributed to the downgrade.
EQT reported total proved reserves of 27.6 Tcfe in 2023, a 10% increase year-over-year due to acquisitions. For FY24, EQT expects sales volume of 2,200 – 2,300 Bcfe and maintenance capital expenditures ranging from $1.950 billion to $2.050 billion.
Kumar predicts that EQT will prioritize debt reduction and asset integration post-merger, potentially leading to excess cash flows for cash returns. The analyst estimates a 2025 free cash flow breakeven of $2.20/mcf for the combined company, slightly lower than the standalone estimate for EQT.
Despite the potential benefits of the merger, Kumar highlights that the level of balance sheet leverage is higher than core gas E&P peers. This may impact cash returns in the short term as EQT focuses on reducing debt with excess cash.
On March 13, 2024, EQT Stock Downgraded Despite Merger News.
EQT Stock Sees Slight Decline to $34.01, Rebounds in After-Hours Trading
On March 13, 2024, EQT stock experienced a slight drop in price, closing at $34.01. This marks a decrease of $0.51 or 1.48% from the previous market close. However, there was a slight uptick in after-hours trading, with the stock rising by $0.09.
EQT Corporation Stock Performance and Financial Metrics Analysis 2024
EQT Corporation is a natural gas production company based in the United States. As of March 13, 2024, the company’s stock performance has been relatively stable, with total revenue holding flat at $1.37 billion in the fourth quarter of the fiscal year. This represents a significant decrease of 58.24% from the previous year’s total revenue of $5.07 billion.
Similarly, EQT’s net income for the fourth quarter stood at $502.06 million, which is the same as the previous quarter and shows no change from the net income of $1.74 billion reported in the previous year. The earnings per share (EPS) for EQT also remained flat at $1.13 for the fourth quarter, compared to $4.22 in the previous year, representing a decrease of 3.63%.
Investors may be looking for signs of growth or improvement in the company’s financial metrics in the coming quarters to drive the stock price higher. It is important for investors to closely monitor EQT’s performance in the natural gas industry and keep an eye on any changes in market conditions that could impact the company’s stock performance. Conducting thorough research and consulting with a financial advisor before making any investment decisions is recommended.
