On Friday, JPMorgan maintained its Overweight rating on EQT Corp. (NYSE:EQT) and increased the price target to $53.00 from the previous $50.00. The $28.25 billion market cap company, currently trading at $47.35 and near its 52-week high of $48.02, appears overvalued according to InvestingPro analysis. The adjustment follows EQT's announcement of expected capital expenditure reductions and production improvements for 2025.
EQT Corp. has made notable strides in drilling and completion (D&C) efficiency, which is anticipated to enhance the capital efficiency of its 2025 program. Originally, the company projected a 2025 capital expenditure (capex) guide of $2.3 to $2.6 billion during their second quarter 2024 earnings call.
However, management now expects to spend at the lower end of this range. This change is attributed to the sale of non-operational assets, which is expected to save approximately $75 million, and additional D&C efficiency gains estimated to save around $50 million.
The Chief Financial Officer (CFO) of EQT, David Knop, has indicated that the previously announced soft fiscal year 2025 production guidance of approximately 2,100 billion cubic feet equivalent (Bcfe) should now be considered the minimum expected volume. The company is experiencing strong well performance in the field, which is contributing to this optimistic outlook.
During the upcoming earnings call, management is set to provide further details on the 2025 guidance, including information on the company's compression projects and their potential impact on future capital expenditures and efficiency.
For the year 2025, JPMorgan has modeled a total production of 2.2 trillion cubic feet equivalent (Tcfe) with a capex of $2.37 billion, aligning closely with the Street's estimate of 2.2 Tcfe at $2.36 billion in capex.
The revised price target of $53 is based on the expectation that EQT stock will trade at 90% of JPMorgan's blended net asset value (NAV). EQT remains JPMorgan's top pick and is featured on the firm's Analyst Focus List. Discover more insights about EQT's valuation and 12 additional key metrics with a comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, EQT Corporation (NYSE:EQT), a leading American natural gas producer, has been making notable strides in its financial and operational developments. Citi analyst Nicholas Herman recently increased EQT AB (ST:EQTAB)'s stock price target to SEK 340.00, up from SEK 330.00, while maintaining a Neutral stock rating. The firm anticipates EQT's adjusted EBITDA to fall slightly short of the Visible Alpha consensus, with a notable 20% lower performance-related earnings but a 5% higher fee-related earnings.
EQT also made headlines with the finalization of its non-operated assets divestiture in Northeast Pennsylvania for approximately $1.25 billion. This strategic move aims to streamline EQT's operational focus and improve its financial position. Furthermore, the company extended its share repurchase program to 2026, indicating its financial strength and commitment to shareholder returns.
In the wake of these developments, Citi reaffirmed its Buy rating for EQT, following discussions with the company's CFO, Jeremy Knop. The confidence stems from the expected benefits of EQT's acquisition of ETRN and the company's capacity to capitalize on regional growth. Additionally, Mizuho (NYSE:MFG) upgraded EQT's stock rating from Neutral to Outperform, reflecting the company's strong position as the second-largest gas producer in the U.S. and its successful operational improvements.
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