Piper Sandler raises EQT stock price target to $49 on long-term gas demand

Investing.com - Piper Sandler raised its price target on EQT Corp. (NYSE:EQT) to $49.00 from $48.00 on Sunday, while maintaining a Neutral rating on the natural gas producer. The new target sits below the average analyst target of $75.00, with InvestingPro data showing the stock has pulled back significantly, dropping nearly 12% over the past week.

The research firm cited EQT (ST:EQTAB)’s favorable positioning to benefit from long-term gas demand in Appalachia, noting the company expects to realize $250 million of free cash flow uplift from recently announced gas supply contracts and other infrastructure projects by fiscal year 2029. The company currently maintains a healthy 74.7% gross profit margin and has demonstrated strong revenue growth of over 60% in the last twelve months.

Piper Sandler pointed out this benefit comes with substantial upfront costs, as EQT plans to spend $1 billion on infrastructure, primarily in fiscal years 2027 and 2028, to achieve the projected free cash flow improvements.

The analyst expressed concern about near-term natural gas fundamentals, specifically mentioning resilient domestic supply and strong seasonal storage build as potential headwinds for the company.

The price target adjustment incorporates growth capital expenditures beginning in fiscal year 2027 and beyond, according to Piper Sandler’s research note.

In other recent news, EQT Corporation reported second-quarter earnings that surpassed analyst expectations. The company achieved adjusted earnings per share of $0.45, exceeding the consensus estimate of $0.42. Revenue for the quarter reached $2.56 billion, significantly higher than the $1.76 billion forecasted by analysts. EQT’s sales volume hit 568 Bcfe, aligning with the high end of its guidance range. This strong performance was attributed to robust well productivity and successful compression projects. The company also continued to benefit from synergies following its acquisition of Equitrans Midstream (NYSE:ETRN) Corporation. These recent developments highlight EQT’s operational efficiency and strategic execution.

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