EQT Corporation Crafts a 52-Week High - Analyst Blog

On Mar 18, 2014, shares of EQT Corporation EQT reached a new 52-week high of $104.72. However, the stock closed the session at $104.30, which reflects a solid return over the past six months. The average trading volume for the last three months aggregated 1,421,220 shares.

EQT Corporation's fourth-quarter increased 9.3% year over year to 47 cents per share but missed the Zacks Consensus Estimate of 66 cents. Net operating revenue in the quarter was up 23% year over year at $453.0 million. However, reported revenues fell short of the Zacks Consensus Estimate of $572.0 million.

EQT, an integrated energy company, is a low-cost producer with a strategic midstream presence. The company's superior cost structure and above-average growth may ease concerns related to volatile natural gas prices.

We remain optimistic on EQT's strategy of divesting the expensive yet less profitable assets and concentrate on more cost-effective and lucrative investment opportunities. EQT's move to sell its gas distribution utility sale to privately held Peoples Natural Gas for $720 million and the transfer of certain pipeline assets owned by Peoples are also in sync with its strategic focus to become a production and pipeline energy company beyond 2014.

However, EQT remains highly exposed to volatile natural gas fundamentals and weak commodity prices, which might result in a lower-than-expected performance. EQT's various multilateral drilling programs across its oil and gas fields face operational headwinds, such as rising service costs, completion delays and equipment failure.

Going forward, production sales volume for 2014 is projected at 460–480 billion cubic feet equivalent (Bcfe), 24% higher than in 2013; and liquids volume is expected at 6,800–6,900 thousand barrel of oil equivalent (MBBl). Production sales volume for first quarter 2014 is projected at 104 Bcfe; and liquids volume is expected at 1,350–1,400 MBBls.

Other Stocks to Consider

EQT Corporation currently carries a Zacks Rank #3 (Hold). Other stocks in the oil and gas industry worth considering include Helmerich & Payne, Inc. HP, Warren Resources Inc. WRES and Patterson-UTI Energy Inc. PTEN. All three stocks have a Zacks Rank #1 (Strong Buy).