EQT: Expanding LNG Exports And Data Center Demand Will Drive Future Upside

EQT’s analyst price target has decreased modestly, falling by about $0.22. Analysts point to slightly lower revenue growth expectations and a higher discount rate. At the same time, positive outlooks for natural gas demand and company positioning continue to support the stock’s fair value.

Analyst Commentary

Recent Street research offers a broad mix of optimistic and more cautious views on EQT's outlook, with analysts highlighting both growth opportunities and potential risks affecting valuation and execution.

Bullish Takeaways

• Bullish analysts note that EQT’s vertically integrated, low-cost operating structure provides a strategic advantage. This supports resilient free cash flow generation even at competitive gas price levels.
• The company is positioned to benefit from expected structural changes in the U.S. natural gas market, fueled in part by expanding LNG exports and increased data center energy demand. These factors could drive a higher price floor for natural gas.
• Several price target increases reflect the view that EQT is prepared to capture growth opportunities arising from energy transition dynamics, particularly in dry gas production and support for large-scale consumers like data centers.
• Operational execution remains a highlight, with ongoing efficiency improvements and a robust project pipeline seen as supporting long-term, high-return growth and value creation.

Bearish Takeaways

• Bearish analysts point to persistent oversupply in the natural gas market and weak near-term supply and demand fundamentals. These conditions may weigh on gas prices and limit upside in valuation.
• Recent price target cuts reflect caution regarding the pace of price recovery, with concerns that industry participants have yet to restrain supply growth sufficiently to restore pricing power.
• There is increased focus on capital allocation and the company’s ability to meet debt reduction targets amid volatile market conditions and evolving growth expectations.

What's in the News

• Wells Fargo initiated coverage of EQT Corporation with an Overweight rating and a $68 price target, citing anticipated structural changes in U.S. natural gas markets that could support higher price floors and reduce risk. This is seen as bullish for equities. The bank highlights rising gas demand from LNG exports and data center energy usage (Wells Fargo).
• Bloomberg reported that EQT is in talks to secure liquefied natural gas supply from NextDecade's proposed Rio Grande LNG export terminal in Texas. This move could further bolster EQT's global LNG strategy (Bloomberg).
• EQT and Sempra Infrastructure signed a 20-year sales and purchase agreement for 2 million tonnes per annum of LNG from the Port Arthur LNG Phase 2 development in Texas, enhancing EQT’s LNG export capacity (Company announcement).

Valuation Changes

• Consensus Analyst Price Target (Fair Value): Decreased modestly from $63.63 to $63.41, reflecting a minor reduction in analysts' fair value expectations.
• Discount Rate: Increased slightly from 7.03% to 7.05%, indicating a marginal increase in perceived risk or required return by analysts.
• Revenue Growth: Declined significantly from 12.68% to 10.71%, suggesting analysts expect a lower growth trajectory going forward.
• Net Profit Margin: Increased slightly from 33.44% to 33.52%, pointing to steady or improving profitability expectations.
• Future P/E: Dropped from 16.37x to 15.82x, as a result of updated earnings forecasts and valuation metrics.