EQT (EQT) Valuation After Kodiak Exit and Strengthening U.S. Natural Gas Demand Dynamics
EQT (EQT) is back on investors radar after fully exiting its long running Kodiak Gas Services stake, locking in the first IPO outcome from its infrastructure portfolio just as US natural gas fundamentals tighten.
See our latest analysis for EQT.
Despite a soft patch in recent weeks, with a 7 day share price return of minus 8.42 percent and a latest close of $55.57, EQT still shows firm underlying momentum. This is supported by a roughly 17 percent year to date share price return and a standout 5 year total shareholder return of about 338 percent as investors lean into the Kodiak exit and improving US gas fundamentals.
If EQT’s move has you thinking more broadly about energy linked opportunities, it could be worth scanning aerospace and defense stocks for other resilient, cash generative names with structural demand tailwinds.
With shares still trading at a double digit discount to consensus targets and analysts forecasting robust cash flow growth, the key question now is whether EQT remains undervalued or if the market is already pricing in that upside.
Most Popular Narrative: 13.2% Undervalued
With EQT last closing at $55.57 against a narrative fair value of $64, the story hinges on how durable its future cash flows really are.
Analysts expect earnings to reach $3.8 billion (and earnings per share of $5.88) by about September 2028, up from $1.1 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $5.9 billion in earnings, and the most bearish expecting $2.5 billion.
Want to see what kind of revenue ramp, margin expansion, and earnings power are baked into that gap? The narrative spells out an aggressive transformation. Curious?
Result: Fair Value of $64 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, faster decarbonization policies or tighter methane and infrastructure regulation could dampen long term gas demand and compress EQT’s margins.
Find out about the key risks to this EQT narrative.
Another Angle on Valuation
On earnings-based valuation, EQT looks far less of a bargain. It trades on about 19.5 times earnings, richer than both the US Oil and Gas industry at 13.3 times and peers at 15.6 times, even though our fair ratio sits higher at 22.3 times. Is the market already front loading a lot of good news here?
See what the numbers say about this price — find out in our valuation breakdown.
Build Your Own EQT Narrative
If you see the story differently or prefer to dig into the numbers yourself, you can shape a fresh EQT view in minutes: Do it your way.
A great starting point for your EQT research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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