EQT (EQT) Valuation Check After Recent Share Price Momentum in the Natural Gas Market

EQT (EQT) has quietly outperformed many energy names recently, with the stock up about 4 % in the past week and nearly 10 % over the past month as gas market sentiment improves.

See our latest analysis for EQT.

The latest move takes EQT’s share price to about $61.17 and adds to a solid run, with a roughly 18 % 90 day share price return and a 1 year total shareholder return of nearly 39 %. This suggests momentum is building as investors reassess gas demand and EQT’s cash generation.

If EQT’s momentum has your attention, this could be a good moment to explore fast growing stocks with high insider ownership for other fast growing opportunities backed by management skin in the game.

With EQT shares trading just below analyst targets but at a sizeable discount to some intrinsic value estimates, the key question now is whether this natural gas leader remains undervalued or if markets are already pricing in future growth.

Most Popular Narrative Narrative: 4.4% Undervalued

With EQT last closing at $61.17 versus a most popular narrative fair value of $64, the story leans toward modest upside built on structural demand shifts.

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 combination is expected to drive robust earnings and margin expansion as legacy contracts roll and new export linked pricing is realized.

Read the complete narrative.

Want to see how this thesis turns into numbers? The narrative leans on faster top line growth, fatter margins, and a future earnings multiple that assumes EQT graduates into a higher quality profit stream. Curious which projections really move the fair value dial and how sensitive they are to long term gas prices? Dive in to unpack the full blueprint behind this valuation call.

Result: Fair Value of $64 (UNDERVALUED)

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

However, this upbeat story could fray if decarbonization policies tighten faster than expected or if Appalachian infrastructure bottlenecks limit EQT’s ability to grow volumes profitably.

Find out about the key risks to this EQT narrative.

Another Angle on Valuation

On earnings based metrics, the picture is less forgiving. EQT trades on a 21.4x price to earnings ratio versus 13.6x for the US Oil and Gas industry and 16.5x for peers, even though our fair ratio estimate is 22.4x. That leaves only a sliver of upside if sentiment cools, especially after a strong run. Alternatively, does the premium simply reflect higher quality cash flows taking hold?

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

Build Your Own EQT Narrative

If you are not fully aligned with this view or prefer to dig into the numbers yourself, you can craft a fresh EQT storyline in just a few 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.

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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.