EQT: Don't Miss This Chance To Sell The Top

Jul. 30, 2022 10:20 AM ETEQT Corporation (EQT)34 Comments

Summary

  • EQT reported a robust Q2 card and raised the cadence for its debt reduction program through 2023. However, management's cautious commentary regarding a potential recession caused it to pause buybacks.
  • EQT recovered rapidly over the past four weeks, leveraging the energy crisis in Europe. However, our analysis suggests the market set up a sharp rally before a potentially steep decline.
  • We believe the rally is unsustainable at the current levels. Therefore, investors who missed cutting exposure in June should use the recent rally to get out.
  • As such, we revise our rating from Hold to Sell.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

The Energy Relationship Between Russia and the European Union. Europe Has Become So Dependent on Russia for Gas

Leestat

Thesis

EQT Corporation (NYSE:EQT) reported a robust Q2 card on July 27, which was largely expected, given the strength of natural gas prices in the quarter. Notwithstanding, the company also highlighted its concerns with the recessionary theme in its earnings commentary.

EQT revenue change % and adjusted EBIT margins % consensus estimates

EQT revenue change % and adjusted EBIT margins % consensus estimates (S&P Cap IQ)

EQT price chart (monthly)

EQT price chart (monthly) (TradingView)

EQT price chart (weekly)

EQT price chart (weekly) (TradingView)

Natural gas futures price chart (weekly)

Natural gas futures price chart (weekly) (TradingView)

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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