On Thursday, Piper Sandler adjusted its price target for EQT Corp. (NYSE:EQT (ST:EQTAB)) to $43.00, down from the previous $43.00, while maintaining an Overweight rating on the stock. The adjustment follows the company's second-quarter 2024 results and its full-year 2024 guidance. EQT Corp. has projected capital expenditures of approximately $1.3 billion for the second half of 2024, which is roughly $115 million more than consensus expectations, primarily due to the earlier-than-anticipated closure of the ETRN acquisition.
The natural gas producer also forecasted second-half 2024 volumes of 1.075 trillion cubic feet equivalent (Tcfe), including planned curtailments of 90 billion cubic feet equivalent (Bcfe), which is about 4% below consensus estimates. Looking ahead, EQT provided a preliminary full-year 2025 outlook, estimating capital expenditures between $2.3 billion and $2.6 billion. This level of spending is anticipated to generate free cash flow in the same range, assuming an average natural gas price of $3.50.
Piper Sandler has revised its third-quarter 2024 earnings per share (EPS) and earnings before interest, taxes, depreciation, amortization, and exploration (EBITDAX) estimates for EQT Corp. from $0.04 and $602 million to $0.22 and $866 million, respectively. This revision reflects the earlier closing of the ETRN acquisition and the updated production and expense guidance provided by the company.
Furthermore, the full-year 2024 EPS and EBITDAX forecasts have been updated from $1.06 and $2,816 million to $1.62 and $3,833 million. These changes incorporate the company's outlook for the second half of 2024 and the impact of the accelerated ETRN acquisition closure. The new estimates and price target reflect the latest operational updates and financial projections provided by EQT Corp.
In other recent news, EQT Corporation (NYSE:EQT), the United States' largest natural gas producer, reported a narrower Q2 loss in 2024, with adjusted earnings per share (EPS) of -$0.08, beating analysts' expectations of -$0.19. However, the company's revenue for the quarter was $952.51 million, missing the consensus estimate of $1.1 billion. EQT's sales volume reached 508 billion cubic feet equivalent (Bcfe), exceeding its high-end guidance due to operational efficiency and strong well performance.
Adding to the recent developments, EQT made a transformative acquisition of Equitrans Midstream (NYSE:ETRN) Corporation, positioning itself as a uniquely integrated natural gas business in America. CEO Toby Z.
Rice also mentioned the potential for these developments to lead to lower well costs and future maintenance capital requirements. For 2024, EQT reaffirmed its total sales volume guidance of 2,100 – 2,200 Bcfe, and post-acquisition, plans to spend an additional $180 – $230 million on Equitrans capital expenditures.
EQT's focus on operational efficiency is reflected in its total per unit operating costs of $1.40 per Mcfe, below the low-end guidance. The company also reduced its total debt from $5.8 billion at the end of 2023 to $5.0 billion, showing progress in its deleveraging plan.
InvestingPro Insights
Following Piper Sandler's revised price target for EQT Corp. (NYSE:EQT), InvestingPro data provides a broader financial perspective on the company. With a market capitalization of $15.5 billion and a P/E ratio at 22.06, EQT shows a solid valuation in its sector. Notably, the company's revenue for the last twelve months as of Q2 2024 stands at $4.48 billion, with a gross profit margin of nearly 45%, indicating a strong ability to convert sales into profit.
InvestingPro Tips highlight that analysts are optimistic about EQT's performance, with nine analysts revising their earnings upwards for the upcoming period. Additionally, the Relative Strength Index (RSI) suggests that the stock is currently in oversold territory, which could signal a potential buying opportunity for investors. With analysts predicting profitability for the year and the company having been profitable over the last twelve months, EQT appears to be on a stable financial footing. Moreover, the company has delivered a strong return over the last five years, reinforcing its position as a potentially attractive investment.
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