EQT (EQT): Exploring Whether Shares Remain Undervalued After Recent Momentum

EQT (EQT) shares have gained momentum recently, rising 9% over the past month and 17% over the past 3 months. Investors are keeping an eye on the latest moves, particularly with energy prices in focus.

See our latest analysis for EQT.

EQT’s share price has accelerated, adding 24.7% since the start of 2024, while its one-year total shareholder return stands at an impressive 34.9%. The strong recent momentum points to renewed optimism around future growth and shifting sentiment, especially during a busy period for energy markets.

If you’re watching where capital is flowing next, this could be the perfect moment to broaden your research and discover fast growing stocks with high insider ownership

Yet with shares now approaching analyst targets but still trading well below intrinsic value, the real question emerges: is EQT currently undervalued, or are markets already accounting for all its future growth potential?

Most Popular Narrative: 7.3% Undervalued

Compared to its latest closing price of $59.04, the most widely followed narrative estimates EQT's fair value at $63.70. This creates a valuation gap that is fueling debate about whether the market is fully appreciating upcoming catalysts.

Accelerating U.S. LNG export capacity, coupled with delays in global competing projects and tightening U.S. supply, supports structurally higher U.S. natural gas price floors through the decade. When paired with EQT's low-cost structure, this scenario could drive robust earnings and margin expansion as legacy contracts roll and new export-linked pricing is realized.

Read the complete narrative.

Want to know what’s behind this bullish price? The secret could be in explosive earnings growth targets and a margin outlook that rivals some of the market’s most profitable sectors. Will the future cash flow live up to the optimism? See which controversial assumptions set this fair value apart from the rest and dig into the full narrative to unlock the details.

Result: Fair Value of $63.70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, including accelerated shifts toward renewables and heightened regulatory pressures. Either of these factors could diminish demand or squeeze future profit margins.

Find out about the key risks to this EQT narrative.

Another View: Profit Multiples Point to a Premium

Looking beyond analyst price targets, EQT is trading at a price-to-earnings ratio of 20.7x. This is higher than both the US Oil and Gas industry average of 13.6x and the peer average of 15.7x, but it is close to our fair ratio estimate of 21.3x. This premium suggests investors are paying up for future growth, but it also raises the stakes if expectations fall short. Is the market’s optimism fully justified here, or could it leave buyers exposed if forecasts disappoint?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own EQT Narrative

If you want a different perspective or believe your own research reveals a new angle, you can craft your own narrative in under three minutes: Do it your way

A great starting point for your EQT research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for More Smart Investment Ideas?

Don’t watch great opportunities pass you by. Use the Simply Wall Street Screener to target stocks primed for momentum, strong dividends, or future growth right now.

• Secure your portfolio with reliable income by targeting these 18 dividend stocks with yields > 3% that offer attractive yields and consistent payout histories.
• Tap into innovation and cutting-edge potential when you browse these 27 AI penny stocks that could shape the next wave of technology breakthroughs.
• Skip the wait and go straight to these 894 undervalued stocks based on cash flows to unlock opportunities trading below their fair value based on future cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com