### BUSINESS

EQT Corporation operates as a natural gas production company in the United States. As of December 31, 2021, it had 25.0 trillion cubic feet of proved natural gas, natural gas liquids, and crude oil reserves across approximately 2.0 million gross acres, including 1.7 million gross acres in the Marcellus play. The company was founded in 1878 and is headquartered in Pittsburgh, Pennsylvania.

### INVESTMENT RATING

** With future capital returns forecasted to exceed the cost of capital, EQT is expected to continue to be an important Value Builder. **

** EQT has a current Value Trend Rating of C (High Neutral). **

This rating combines very contradictory signals from two proprietary PTR measures of a stock’s attractiveness. EQT has a very high Appreciation Score of 86 but a slightly negative Power Rating of 35, with the High Neutral Value Trend Rating the result.

** EQT’s stock is selling well below targeted value. ** The current stock price of $37.30 compares to targeted value 12 months forward of $95.

EQT’s very high appreciation potential results in an appreciation score of 86 (only 14% of the universe has greater appreciation potential.)

** EQT has a Power Rating of 35. ** (This slightly negative Power Rating indicates that EQT’s chances of enjoying favorable investment performance over the near to intermediate term are only average.)

Factors contributing to this slightly negative Power Rating include: EQT’s earnings estimates have fallen very significantly in recent months; and recent price action has been neutral. An offsetting factor is the Natural Gas Transmission & Distribution comparison group is currently in a modestly favorable position.

### INVESTMENT PROFILE

EQT’s financial strength is average. Financial strength rating is 47.

** Relative to the S&P 500 Composite, EQT Corp has slightly more Value than Growth characteristics; its appeal is likely to be to Income-oriented investors; the perception is that EQT is higher risk. ** Relative weaknesses include: low forecasted profitability, low historical profitability, low financial strength, and high earnings variability. EQT’s valuation is low: moderate dividend yield, low P/E ratio, and low price/book ratio. EQT has low market capitalization.

### CURRENT SIGNALS

** EQT’s current operations are eroding. ** Return on equity is falling, reflecting: declining pretax margin; and falling leverage.

** EQT’s current technical position is mixed. ** The stock price is in a 3.3 month down move. The stock has declined 18.9% from its prior high. The 200 day moving average is in an uptrend. The stock price is below its 200 day moving average.

### ALERTS

Important positive changes in EQT Corp (NYSE: EQT) investment behavior have recently occurred: the stock rose on very heavy volume.

Significant negative changes in EQT Corp (NYSE: EQT) fundamentals have recently occurred. Negative developments: the stock’s power rating fell below 50, significant quarterly sales deceleration occurred, the consensus estimate for December, 2024 decreased significantly, and the consensus estimate for December, 2025 decreased significantly. Positive development: significant quarterly earnings acceleration occurred.

In light of this we are reviewing our current Overall Rating of C. This review will be completed in the next several days.

On 2/21/24, EQT Corp (NYSE: EQT) stock enjoyed a major increase of 10.6%, closing at $37.30. Moreover, trading volume in this advance was exceptionally high at 221% of normal. The stock has performed in line with the market over the last nine months and has risen 6.8% during the last week.

### CASH FLOW

** In 2023, EQT experienced a very significant reduction in cash of -$1,378 million (-94%). Sources of cash were much lower than uses. ** Cash generated from 2023 EBITDA totaled +$4,047 million. Non-operating sources contributed +$50 million (+1% of EBITDA). Cash taxes contributed +$93 million (+2% of EBITDA). Re-investment in the business amounted to -$7,300 million (-180% of EBITDA). On a net basis, debt investors withdrew -$134 million (-3% of EBITDA) while equity investors furnished +$1,865 million (+46% of EBITDA).

** EQT’s Non-operating Income, %EBITDA has enjoyed a volatile overall uptrend over the period. ** This improvement was accompanied by stability for the Eqt Peer Group. In most years, EQT was in the third quartile and second quartile. Currently, EQT is slightly above median at +1% of EBITDA (+$50 million).

** EQT’s Cash Taxes, %EBITDA has experienced a downtrend over the period. ** This downtrend was accompanied by stability for the Eqt Peer Group. In most years, EQT was in the top quartile. Currently, EQT is upper quartile at +2% of EBITDA (+$93 million).

** EQT’s Business Re-investment, %EBITDA has suffered a volatile overall downtrend over the period. ** This downtrend was accompanied by an opposite trend for the Eqt Peer Group. In most years, EQT was in the second quartile and lower quartile. Currently, EQT is lower quartile at -180% of EBITDA (-$7,300 million).

** EQT’s Debt Investors, %EBITDA has experienced a volatile overall downtrend over the period. ** This downtrend was accompanied by a similar trend for the Eqt Peer Group. (Since 2021 Debt Investors, %EBITDA has accelerated very sharply.) In most years, EQT was in the top quartile and third quartile. Currently, EQT is upper quartile at -3% of EBITDA (-$134 million).

** EQT’s Equity Investors, %EBITDA has enjoyed a volatile overall uptrend over the period. ** This improvement was accompanied by a similar trend for the Eqt Peer Group. In most years, EQT was in the top quartile and second quartile. Currently, EQT is upper quartile at +46% of EBITDA (+$1,865 million).

** EQT’s Change in Cash, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by stability for the Eqt Peer Group as well. In most years, EQT was in the third quartile and second quartile. Currently, EQT is lower quartile at -34% of EBITDA (-$1,378 million).

** EQT’s Cash, %Revenue has suffered a very strong overall downtrend over the period. ** This downtrend was accompanied by a similar trend for the Eqt Peer Group. In most years, EQT was in the lower quartile and top quartile. Currently, EQT is lower quartile at +1%.

### PROFITABILITY

** EQT’s return on equity has improved very significantly since 2014. The current level of 11.7% is 1.40X the low for the period and is -25.9% from the high. **

This very significant improvement was due to very strong positive trend in pretax operating return and small positive trend in non-operating factors.

The productivity of EQT’s assets rose over the full period 2014-2023: asset turnover has enjoyed a very strong overall uptrend.

Reinforcing this trend, pretax margin enjoyed a volatile overall uptrend that accelerated very sharply from the 2021 level.

Non-operating factors (income taxes and financial leverage) had a minor positive influence on return on equity.

** EQT’s return on equity is at median (11.7%) for the four quarters ended December, 2023. **

Operating performance (pretax return on assets) is at median (8.3%) reflecting asset turnover that is below median (0.27X) and slightly below median pretax margin (30.4%).

Tax “keep” rate (income tax management) is below median (82.5%) resulting in after tax return on assets that is slightly below median.

Financial leverage (leverage) is at median (1.71X).

### GROWTH RATES

There are no significant differences between EQT’s longer term growth and growth in recent years.

EQT’s historical income statement growth has been higher than growth in the balance sheet. Revenue growth has exceeded asset growth; earnings growth has exceeded equity growth.

** Annual revenue growth ** has been 1.7% per year.

** Total asset growth ** has been -4.6% per year.

** Annual E.P.S. growth ** has been 9.9% per year.

** Equity growth ** has been -0.3% per year.

No consensus growth rate forecast is available for EQT.

** Relative to the Eqt Peer Group, EQT’s historical growth measures are generally third quartile. ** Equity growth (-0.3%) has been above median. Total asset growth (-4.6%) has been slightly below median. Revenue growth (1.7%) has been below median. E.P.S. growth (9.9%) has been substantially below median.

** Consensus growth forecast is unavailable. **

### PRICE HISTORY

** Over the full time period, EQT’s stock price performance has been volatile and significantly below market. ** Between April, 2013 and February, 2024, EQT’s stock price fell -50%; relative to the market, this was a -84% loss. Significant price moves during the period: 1) August, 2021 – May, 2022: +160%; 2) February, 2020 – April, 2020: +149%; and 3) June, 2016 – November, 2019: -89%.

### TOTAL INVESTMENT RETURNS

** Current annual total return performance of 10.1% is above median relative to the S&P 500 Composite. **

In addition to being above median relative to S&P 500 Composite, current annual total return performance through January, 2024 of 10.1% is at median relative to EQT Corp Peer Group.

** Current 5-year total return performance of 13.7% is above median relative to the S&P 500 Composite. **

Through January, 2024, with above median current 5-year total return of 13.7% relative to S&P 500 Composite, EQT’s total return performance is at median relative to EQT Corp Peer Group.

### VALUATION BENCHMARKS

** Relative to S&P 500 Composite, EQT’s overall valuation is quite low. ** Four of five factors are lower quartile. The highest factor is the ratio of enterprise value/revenue, followed by the ratio of enterprise value/assets, then by the ratio of enterprise value/earnings before interest and taxes, then by the price/earnings ratio. The lowest factor, price/equity ratio, is lower quartile.

** Relative to EQT Peer Group, EQT’s overall valuation is normal. ** The highest factor, the price/earnings ratio, is slightly above median. Price/equity ratio is at median. Ratio of enterprise value/assets is at median. Ratio of enterprise value/earnings before interest and taxes is at median. The lowest factor, the ratio of enterprise value/revenue, is slightly below median.

** EQT has a minor value gap compared to the median valuation. ** For EQT to rise to median valuation, its current ratio of enterprise value/revenue would have to rise from the current level of 3.23X to 3.32X. If EQT’s ratio of enterprise value/revenue were to rise to 3.32X, its stock price would be lower by $1 to $39.

For EQT to hit lower quartile valuation relative to the EQT Peer Group, its current ratio of enterprise value/revenue would have to fall from the current level of 3.23X to 2.50X. If EQT’s ratio of enterprise value/revenue were to fall to 2.50X, its stock price would decline by $-11 from the current level of $37.

### VALUE TARGETS

** With future capital returns forecasted to exceed the cost of capital, EQT is expected to continue to be an important Value Builder. **

EQT’s current Price Target of $110 represents a +194% change from the current price of $37.30.

This very high appreciation potential results in an appreciation score of 86 (only 14% of the universe has greater appreciation potential.)

Notwithstanding this high Appreciation Score of 86, the moderately low Power Rating of 35 results in an Value Trend Rating of C.

** EQT’s current Price Target is $110 (+41% from the 2023 Target of $78 and +194% from the 02/21/24 price of $37.30). ** This dramatic rise in the Target is the result of a +10% increase in the equity base and a +29% increase in the price/equity multiple. The forecasted increase in return on equity has a very large positive impact on the price/equity multiple and the forecasted increase in growth has a very large positive impact as well. Partially offsetting these Drivers, the forecasted increase in cost of equity has a very large negative impact.

** PTR’s return on equity forecast is 16.3% — above our recent forecasts. ** Forecasted return on equity enjoyed a dramatic, erratic increase between 2015 and 2023. The current forecast is significantly above the 2021 low of 4%.

** PTR’s growth forecast is 6.0% — above our recent forecasts. ** Forecasted growth suffered a dramatic, erratic decline between 2015 and 2023. The current forecast is steady at the 2015 peak of 4%.

** PTR’s cost of equity forecast is 8.7% — slightly above recent levels. ** Forecasted cost of equity exhibited a modest, erratic increase between 2015 and 2023. The current forecast is well above the 2021 low of 1.9%.

At EQT’s current price of $37.30, investors are placing a negative value of $-40 on its future investments. This view is not supported by the company’s most recent performance that reflected a growth rate of 0.0% per year, and a return on equity of 8.9% versus a cost of equity of 4.2%.

PTR’s 2025 Price Target of $110 is based on these forecasts and reflects an estimated value of existing assets of $44 and a value of future investments of $65.

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