National Fuel Gas Company (NFG) AI Stock Analysis

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National Fuel Gas Company

(NYSE:NFG)

Rating:70Outperform

Price Target:―

National Fuel Gas Company demonstrates strong operational performance with stable cash flow, bolstered by recent earnings growth and positive technical indicators. However, high leverage and a negative P/E ratio pose significant risks. The upward revision in earnings guidance and strong demand outlook are strong positives, but regulatory challenges and valuation concerns weigh on the overall score.

Positive Factors

Earnings

The company's adjusted earnings per share exceeded expectations due to lower operating and maintenance costs and higher non-service pension and post-retirement benefits.

Hedging Strategy

National Fuel Gas has effectively managed its hedging strategy, increasing its hedged volume for 2025 and 2026 to provide more stability.

Production Guidance

National Fuel Gas updated its earnings guidance for 2025 higher, driven by increased production and reduced expenses.

Negative Factors

Buyback Strategy

The buyback pace has slowed as the company seeks more flexibility amidst current macroeconomic uncertainties.

Market Position

Given the company’s relatively lower leverage to natural gas prices, it is seen as a disadvantage when compared to similar natural gas companies.

Revenue Impact

New rates approved by FERC are expected to result in a modest decline in revenue, reducing it by $500,000 annually.

National Fuel Gas Company (NFG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$7.46B

Dividend Yield2.5%

Average Volume (3M)537.76K

Price to Earnings (P/E)188.0

Beta (1Y)0.38

Revenue Growth7.14%

EPS Growth-90.91%

CountryUS

Employees2,311

SectorEnergy

Sector Strength44

IndustryOil & Gas Integrated

Share Statistics

EPS (TTM)2.39

Shares Outstanding90,351,974

10 Day Avg. Volume353,779

30 Day Avg. Volume537,758

Financial Highlights & Ratios

PEG Ratio0.36

Price to Book (P/B)2.68

Price to Sales (P/S)0.00

P/FCF Ratio105.82

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue0.93

Enterprise Value/Gross Profit7.24

Enterprise Value/Ebitda2.47

Forecast

1Y Price Target

$87.00

Price Target Upside5.87% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

National Fuel Gas Company Business Overview & Revenue Model

Company DescriptionNational Fuel Gas Company (NFG) is a diversified energy company that operates within the natural gas sector. Engaged in a range of activities including exploration, production, gathering, transportation, and distribution of natural gas, NFG serves customers primarily in the regions of Western New York and Northwestern Pennsylvania. The company's operations are divided into several segments: Exploration and Production, Pipeline and Storage, Utility, and Energy Marketing, each contributing to its comprehensive service offerings and market presence.

How the Company Makes MoneyNational Fuel Gas Company generates revenue through its diversified operations across multiple segments. The Exploration and Production segment focuses on the extraction of natural gas and oil, selling these resources to the market. The Pipeline and Storage segment earns income by transporting and storing natural gas through its extensive network of pipelines and storage facilities, charging fees for these services. The Utility segment provides natural gas distribution services to residential, commercial, and industrial customers, collecting revenue through regulated rates. Additionally, the Energy Marketing segment involves the sale of natural gas to wholesale, commercial, and industrial customers, generating revenue through purchasing agreements and market sales. Strategic partnerships and regulatory frameworks in its operational regions further support NFG's revenue streams.

National Fuel Gas Company Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q2-2025)

% Change Since: 7.03%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth in earnings, production, and strong demand outlooks for National Fuel Gas Company. However, regulatory challenges and delays in the share buyback program were noted as concerns. Overall, the positive aspects significantly outweigh the negatives.

Q2-2025 Updates

Positive Updates

Earnings Increase

National Fuel Gas Company reported a more than 30% increase in earnings compared to last year, driven by momentum across all business segments.

Production Growth

Seneca Resources reported an 8% sequential growth in production, with outstanding well results from the Utica program in Elliott County.

Utility Earnings Boost

The utility segment saw an earnings per share increase of $0.22, primarily due to a rate settlement approved by the New York PSC.

Successful Hedging Strategy

The company added 76 Bcf of swaps and collars for fiscal '26 and '27 with swaps executed at over $4 and collars with a floor of $4 and cap of $5.50.

Record Production and Throughput

Seneca achieved record production of almost 106 Bcf, driving all-time high gathering volumes of nearly 130 Bcf.

Strong Demand Outlook

The outlook for natural gas remains strong, with increasing demand from LNG exports and domestic energy needs, positioning National Fuel well to capture market share.

Debt Refinancing

National Fuel issued $1 billion in new notes, achieving record low credit spreads and managing fixed income liabilities effectively.

Negative Updates

Rate Decrease at Empire Pipeline

The company agreed to a modest $500,000 rate decrease at Empire Pipeline, which will take effect in November.

Regulatory and Litigation Challenges

Significant energy infrastructure projects face substantial regulatory and litigation risks, which may impact future developments.

Buyback Program Adjustment

The company reduced its buyback activity amid broader macroeconomic uncertainty, potentially delaying the completion of the buyback program.

Company Guidance

During the National Fuel Gas Company Q2 Fiscal 2025 Earnings Conference Call, several key metrics and guidance updates were discussed. The company reported a more than 30% increase in earnings compared to last year, driven by strong performance across its businesses, including an 8% sequential growth in production. The utility segment saw earnings per share rise by $0.22, influenced by a rate settlement approved by the New York PSC. Earnings guidance for adjusted operating results was updated to a range of $6.75 to $7.05 per share, reflecting a $0.15 per share increase from prior guidance, based on a NYMEX price of $3.50 per MMBtu. The company highlighted a capital efficiency trajectory, with production increasing and capital costs decreasing over the next few years. Additionally, recent improvements in well design have led to record production levels, with notable success in their Utica program, contributing to these metrics.

National Fuel Gas Company Financial Statement Overview

Summary

National Fuel Gas Company shows operational strength with stable margins and effective cash flow management, though it faces challenges with revenue consistency and high leverage. The TTM period highlights concerns about profitability and equity dependence, suggesting the need for careful strategic planning to enhance financial stability and growth.

Income Statement

Positive

The company demonstrated strong gross profit margins, though net income has been volatile. The recent TTM data shows negative net income, indicating potential challenges. Revenue growth has been inconsistent, with a noticeable decline in the latest TTM period compared to prior years. EBIT and EBITDA margins are stable, suggesting operational efficiency despite revenue fluctuations.

Balance Sheet

Neutral

The balance sheet shows a high debt-to-equity ratio, indicating significant leverage which poses a risk in volatile markets. The equity ratio has decreased, showing reduced equity financing. However, historical ROE has been strong, reflecting effective use of equity. The latest TTM balance sheet shows a very low stockholders' equity, raising concerns about financial stability.

Cash Flow

Positive

Cash flow analysis reveals strong operating cash flow relative to net income, highlighting good cash generation capabilities. Free cash flow has been positive yet fluctuating, with recent growth in free cash flow suggesting improved capital management. The free cash flow to net income ratio indicates efficient conversion of income into cash.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
2.07B	1.94B	2.17B	2.19B	1.74B	1.55B
	Gross Profit
1.02B	817.70M	847.85M	902.96M	759.72M	567.70M
	EBIT
155.43M	209.72M	755.15M	814.52M	639.92M	461.48M
	EBITDA
737.13M	691.71M	1.18B	1.16B	976.50M	760.73M
	Net Income Common Stockholders
39.56M	77.51M	476.87M	566.02M	363.65M	-123.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.95M	38.22M	55.45M	46.05M	31.53M	20.54M
	Total Assets
8.48B	8.32B	8.28B	7.90B	7.46B	6.96B
	Total Debt
0.00	2.78B	2.67B	2.69B	2.79B	2.66B
	Net Debt
2.90B	2.74B	2.62B	2.65B	2.76B	2.64B
	Total Liabilities
5.71B	5.47B	5.32B	5.82B	5.68B	4.99B
	Stockholders Equity
2.77B	2.85B	2.96B	2.08B	1.79B	1.97B
Cash Flow		Free Cash Flow
70.03M	134.72M	227.21M	695.00K	39.82M	-481.60M
	Operating Cash Flow
953.57M	1.07B	1.24B	812.52M	791.55M	740.81M
	Investing Cash Flow
-876.14M	-933.90M	-1.11B	-518.70M	-633.22M	-1.22B
	Financing Cash Flow
-36.90M	-149.28M	-207.00M	-276.24M	-58.74M	476.09M

National Fuel Gas Company Technical Analysis

Technical Analysis Sentiment

Positive

Last Price82.18

Price Trends

50DMA

79.62

Positive

100DMA

76.16

Positive

200DMA

68.06

Positive

Market Momentum

MACD

0.80

Positive

RSI

54.63

Neutral

STOCH

35.32

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NFG, the sentiment is Positive. The current price of 82.18 is above the 20-day moving average (MA) of 81.67, above the 50-day MA of 79.62, and above the 200-day MA of 68.06, indicating a bullish trend. The MACD of 0.80 indicates Positive momentum. The RSI at 54.63 is Neutral, neither overbought nor oversold. The STOCH value of 35.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NFG.

National Fuel Gas Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EC	77 Outperform	$18.43B	5.44	18.64%	11.05%	-2.26%	-20.04%
E	74 Outperform	$46.38B	17.07	4.78%	4.92%	-2.17%	-25.00%
EQNR	73 Outperform	$66.77B	7.72	18.28%	4.62%	3.96%	-1.69%
YPF	72 Outperform	$13.64B	7.95	15.54%	―	8.58%	―
TGS	71 Outperform	$4.05B	10.42	20.40%	―	37.43%	395.49%
NFG	70 Outperform	$7.46B	188.00	1.30%	2.50%	7.14%	-90.91%
Sector *	57 Neutral	$7.23B	3.16	-4.49%	5.63%	0.82%	-49.15%

* Energy Sector Average

Performance Comparison

NFG

National Fuel Gas Company

82.18

27.97

51.60%

Ecopetrol SA

8.93

-1.18

-11.67%

Eni SPA

30.64

1.99

6.95%

EQNR

Equinor ASA

24.70

-0.99

-3.85%

TGS

Transportadora De Gas Sa Ord B

27.25

9.61

54.48%

YPF

YPF Sociedad Anonima

33.71

13.44

66.30%

National Fuel Gas Company Corporate Events

Business Operations and StrategyFinancial Disclosures

National Fuel Gas Updates Investor Presentation

Neutral

Apr 30, 2025

On April 30, 2025, National Fuel Gas Company updated its Investor Presentation to include non-GAAP financial measures, which are intended to provide investors with alternative insights into the company’s operational performance and financial health. The release also highlighted numerous factors that could impact future results, such as regulatory changes, economic conditions, and market pressures, emphasizing the inherent uncertainties in the energy sector.

Executive/Board Changes

National Fuel Gas Announces Leadership Transition

Neutral

Apr 3, 2025

Donna L. DeCarolis, President of National Fuel Gas Distribution Corporation, announced her retirement effective July 1, 2025. This management change, disclosed in a press release dated April 3, 2025, marks a significant transition for the company as it prepares for leadership changes in its operations.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.