At the current price of $37, what are market expectations regarding EQT’s future operating performance? Over the next 6 years, EQT shares will need to reach $63 to achieve average annual stock market performance of 9.0%. To achieve Upper quartile performance, EQT’s stock price will need to reach $74 by 2029.
Executive Summary
- Price Target Research identifies EQT as having: above average expected growth, above average financial strength, average profitability, and instability.
- Average valuation, average shareholder returns. Current valuation levels are average relative to the EQT Peer Group. Recent market returns have tracked the EQT Peer Group. Total shareholder returns expected to significantly beat the overall equity market. Based on current investor expectations, EQT shares should reach a level of $128 by 2029 — an 24.0% per year total shareholder return. A 2029 stock price of $63 would reflect median performance and a price of $74 would be required to reach upper quartile performance.
- EQT’s achieved growth is modestly above average. Historical growth has been high relative to the EQT Peer Group and forecasted growth is relatively high. Revenue Growth has been superior. EPS Growth has lagged. EQT’s historical income statement growth and balance sheet growth have diverged. Revenue growth has exceeded asset growth; earnings growth has fallen short of equity growth driving erosion in return on equity.
- Profitability is slightly above average. The company has very high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
- EQT’s risk profile is unfavorable. Overall variability has been above average with above average revenue variability, above average E.P.S. variability, and only average stock price volatility. Financial Strength is only average and earnings’ expectations are very low. The debt/capital ratio has declined.
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