In a report released on November 9, Devin McDermott from Morgan Stanley reiterated a Buy rating on EQT, with a price target of $69.00.
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Devin McDermott has given his Buy rating due to a combination of factors that highlight EQT’s strong financial and strategic positioning. Over the past five years, EQT has significantly transformed its business by increasing production by over 50%, reducing costs by 30%, and doubling its free cash flow (FCF). This transformation has positioned EQT at the lower end of the US gas cost curve, making it a competitive player in the market.
Looking forward, EQT’s management has outlined a compelling growth strategy that includes a $550 million increase in fee-based cash flow and a $400 million reduction in upstream maintenance spending, which is expected to support a $1 billion higher run-rate FCF. The company’s “Well-to-Watt” strategic projects and gas sales deals are key drivers of this growth, providing a resilient cash flow and attractive dividends. Additionally, EQT’s investments in water infrastructure have already resulted in significant cost savings, further enhancing its financial efficiency. These factors contribute to McDermott’s conviction that EQT offers the best risk-adjusted opportunity to benefit from higher and more volatile US gas prices.
According to TipRanks, McDermott is a 5-star analyst with an average return of 9.1% and a 55.96% success rate. McDermott covers the Energy sector, focusing on stocks such as Chevron, Expand Energy, and Civitas Resources.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $68.00 price target.