Street Calls of the Week
Investing.com - Citi maintained its Buy rating and $60.00 price target on EQT Corp. (NYSE:EQT), currently trading near its 52-week high at $57.77, following news that the company will supply natural gas to a major power plant conversion project in Western Pennsylvania. The natural gas producer, with a market capitalization of $36 billion, has demonstrated strong momentum with a 60% return over the past year.
The former 2.7GW Bruce Mansfield Power Plant, previously coal-fired, will be converted into a larger 3.6GW natural gas-fired generation facility with a collocated data center, according to information released Tuesday.
The converted facility will require approximately 800 million cubic feet per day of natural gas, with EQT (ST:EQTAB) cited as the project’s natural gas supplier. No other suppliers were mentioned in the announcement, suggesting EQT may be the sole provider.
This agreement aligns with EQT’s project-oriented growth strategy, with the company’s newly-acquired Olympus assets likely to contribute some of the feedgas due to their proximity to the site.
Citi views the size of the project and associated growth potential for EQT, estimated at approximately 12%, as positive factors, despite the potentially long development timeline, though specific contract terms, duration, and pricing details have not yet been disclosed.
In other recent news, EQT Corporation announced an expected total gain on derivatives of $720 million for the second quarter of 2025, alongside net cash settlements paid of $101 million. The company also disclosed a derivatives net gain of $720 million on a non-cash basis in an 8-K update, with UBS maintaining its Buy rating and $64 price target for EQT. Jefferies raised its price target for EQT to $70 from $60, reflecting the impact of EQT’s acquisition of Olympus Energy and first-quarter results. Mizuho (NYSE:MFG) reinstated coverage on EQT with an Outperform rating and a $66 price target, citing potential growth in U.S. LNG exports and expected increased power demand. Barclays (LON:BARC) initiated coverage on EQT with an Overweight rating and a $65 price target, highlighting the company’s strong exposure to natural gas amidst price volatility. EQT is projected to generate approximately $600 million of free cash flow uplift by 2028, according to Mizuho. Barclays noted that EQT’s reintegration with Equitrans Midstream (NYSE:ETRN) has lowered its free cash flow breakeven point, enhancing cash flow generation at low prices.
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