EQT Corporation (NYSE:EQT) Analysts Are Way More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for EQT Corporation (NYSE:EQT), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Shares are up 8.0% to US$42.06 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the latest downgrade, the current consensus, from the 13 analysts covering EQT, is for revenues of US$3.6b in 2022, which would reflect a painful 56% reduction in EQT's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 89% to US$0.82. Before this latest update, the analysts had been forecasting revenues of US$6.1b and earnings per share (EPS) of US$2.70 in 2022. There looks to have been a major change in sentiment regarding EQT's prospects, with a sizeable cut to revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for EQT

Analysts lifted their price target 6.0% to US$52.19, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic EQT analyst has a price target of US$64.00 per share, while the most pessimistic values it at US$41.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await EQT shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 66% by the end of 2022. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 0.4% annually for the foreseeable future. So it's pretty clear that EQT's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for EQT dropped from profits to a loss this year. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that EQT revenue is expected to perform worse than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for EQT going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.