Street Calls of the Week
Investing.com - Mizuho (NYSE:MFG) has reinstated coverage on EQT Corp. (NYSE:EQT) with an Outperform rating and a $66.00 price target. According to InvestingPro data, the stock currently trades at $56.16, with analyst targets ranging from $36 to $74, suggesting significant potential upside from current levels.
The research firm cited potential growth in U.S. LNG exports, limited supply additions, and expected increased power demand from AI data centers as factors supporting higher natural gas prices over the next 12-18 months.
As the second-largest gas producer with a low break-even price, Mizuho believes EQT (ST:EQTAB) is positioned to benefit from these industry trends despite wavering investor sentiment on U.S. natural gas prices.
Mizuho expects EQT to see a 30-cent improvement to corporate differentials when firm sales contracts begin in 2027, potentially generating approximately $600 million of free cash flow uplift by 2028, beyond gains from higher Henry Hub prices.
The research firm noted that while EQT’s Olympus acquisition was unexpected, it does not compromise the company’s deleveraging outlook, and despite trading at a premium valuation, EQT still offers approximately 20% NAV upside.
In other recent news, EQT Corp has completed its acquisition of Olympus Energy assets, issuing over 25 million shares and paying approximately $440 million in cash as part of the transaction. This acquisition includes both oil and gas properties and related upstream and midstream assets. EQT also extended the maturity date of its revolving credit facility by one year, with the extension effective in 2025. In a separate development, EQT has agreed to settle a class action lawsuit related to its 2017 merger with Rice Energy for $167.5 million. This settlement marks a significant resolution after six years of litigation. Additionally, Barclays (LON:BARC) has initiated coverage on EQT with an Overweight rating, citing the company’s strong exposure to natural gas and potential for sustainable growth. Analysts from Bernstein have also highlighted EQT as a top investment idea, pointing to its strong position in the U.S. natural gas market. Lastly, EQT announced the sale of Acumatica to Vista Equity Partners, a transaction expected to conclude in the third quarter of 2025.
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