Here's Why Investors Should Hold on to EQT Stock Right Now

EQT Corporation EQT has gained 32.2% in the past year, outpacing the 18.4% rise of the composite stocks belonging to the industry.

What's Favoring the EQT Stock?

EQT, a leading natural gas producer in North America, carries a Zacks Rank #3 (Hold) and has established a strong presence in the highly productive Appalachian Basin. The company's production prospects are robust, with numerous prime drilling locations throughout this gas-rich region. As natural gas is a cleaner-burning fossil fuel, EQT is well-positioned to benefit from the growing demand for clean energy sources. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

Moreover, the U.S. Energy Information Administration (“EIA”) forecasts that the price of natural gas will increase to an average of $3.00 per million British thermal units (MMBtu) throughout the remainder of the winter months from $2.00 per MMBtu in November, driven by heightened demand for heating fuel. As a major gas producer, the company stands to benefit significantly from this anticipated rise in commodity prices.

The company is at the forefront when it comes to establishing emissions reduction goals. EQT’s ambitious goal is to achieve net zero scope 1 and scope 2 greenhouse gas emissions by 2025.

Risks to EQT’s Business

EQT Corporation has experienced a notable increase in its total debt, which rose to $13.8 billion as of Sept. 30, 2024, from $5.8 billion at the end of 2023. This substantial increase raises questions about the company's financial flexibility and its ability to pursue strategic objectives effectively. 

Also, EQT's engagement in exploration and production activities leaves it vulnerable to significant fluctuations in oil and gas prices, resulting in a highly unpredictable business environment for this upstream energy company. Some other major exploration and production firms that are also exposed to commodity price volatility are ConocoPhillips COP, Diamondback Energy, Inc. FANG and EOG Resources EOG.

ConocoPhillips has secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale.

Diamondback Energy, a leading pure-play Permian operator, has reported ongoing enhancements in the average productivity per well in the Midland Basin. Thus, the exploration and production company will likely continue witnessing increased production volumes.

In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook.

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