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On Friday, UBS analyst Josh Silverstein maintained a Neutral rating with a $58.00 price target on EQT Corporation (NYSE:EQT), one of the largest natural gas producers with a market capitalization of $31.6 billion. According to InvestingPro data, analyst targets for EQT (ST:EQTAB) range from $35 to $73, with the stock currently trading near $53. Silverstein expects EQT to deliver another strong operational quarter, which would continue the trend of production outperformance following the acquisition of ETRN. The company’s focus, according to Silverstein, remains on reducing its debt, with free cash flow (FCF) being allocated towards lowering the debt balance to $7.5 billion or less by the end of 2025. InvestingPro data shows current total debt at $9.4 billion, with a debt-to-equity ratio of 0.46 and an overall Financial Health score of "FAIR."
EQT has been concentrating on debt reduction as a key financial strategy. Silverstein anticipates that the company’s free cash flow will be directed towards achieving the targeted debt level, reflecting a disciplined approach to financial management. The company generated $573 million in levered free cash flow over the last twelve months, with revenue reaching $5 billion and a healthy gross profit margin of 58%.
Additionally, there is anticipation for an update on EQT’s initiatives related to power contracting. Following a relatively quiet second half of 2024, expectations have increased for EQT to announce a power-linked contract in 2025. Such a development could potentially boost both production volumes and realizations for the company. InvestingPro subscribers can access 12 additional key insights about EQT’s growth prospects and financial health, along with detailed valuation metrics and peer comparison tools.
Silverstein’s comments also highlight the market’s interest in EQT’s efforts to secure power contracts, which could provide additional support to the company’s financial performance. The analyst expects EQT to share progress on these initiatives, which have become a focal point for stakeholders.
EQT Corporation has not provided any new public information regarding its power contracting initiatives or financial performance since the analyst’s comments. The market continues to monitor EQT’s operational and financial developments, particularly in light of the company’s strategic focus on debt reduction and potential power contracting agreements.
In other recent news, EQT Corporation has reported a significant financial event, expecting a total loss of $184 million on derivatives for the quarter ending December 31, 2024. Despite this loss, the company anticipates net cash settlements received on derivatives to amount to $181 million, with a major portion coming from NYMEX natural gas hedge positions. Additionally, EQT Corporation has introduced its 2025 Short-Term Incentive Plan (2025 STIP) aimed at aligning executive and employee interests with those of shareholders, featuring updated performance measures such as free cash flow per share and total capital expenditures.
EQT Corporation has also made strategic amendments to the indentures related to notes issued by its subsidiary, EQM Midstream Partners, LP. These amendments, contingent upon ongoing tender and exchange offers, are designed to remove certain restrictive covenants and default conditions. In governance news, EQT has appointed Thomas F. Karam as the new independent Board Chair following the retirement of several board members. This leadership change is part of EQT’s efforts to enhance board oversight and align its leadership structure with strategic priorities.
Meanwhile, Deutsche Bank (ETR:DBKGn) has upgraded CVC Capital Partners (WA:CPAP)’ stock rating from Hold to Buy, citing the resilience of its management fee-related earnings. The analysts at Deutsche Bank have also increased the price target for CVC Capital to €22.50, expressing confidence in the company’s potential for future growth despite recent market volatility. These developments reflect the dynamic landscape in which EQT Corporation and other companies are operating, with strategic decisions and market analyses shaping their current and future operations.
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