EQT Stock Gains 31% in a Year: Here's What Investors Should Know

EQT Corporation EQT, a leading U.S.-based natural gas producer, has seen its share price surge 31.2% over the past year, outperforming the sub-industry, which rose 16.2% over the same period. EQT has outpaced its peers within the sub-industry, including Antero Resources Corporation AR and Range Resources Corporation RRC. Antero Resources' shares have risen 15.7% while Range Resources’ stock increased 18.8% during the same time frame.

EQT is primarily involved in the production of natural gas, with numerous untapped drilling locations within the highly productive Appalachian Basin in the United States, presenting a robust production outlook. Let us look at the key factors influencing the company’s recent gains and performance.

Positive Factors Boosting EQT’s Performance

Rising Demand for Natural Gas: EQT, being a pure-play natural gas producer, is set to benefit from the increasing demand for natural gas as a cleaner-burning fuel. The rapid development of gas-fired power plants, the rise in data centers and the use of artificial intelligence, combined with ongoing coal plant retirements, are expected to drive demand growth for natural gas in the Appalachian region. EQT estimates that these trends could contribute to nearly 10 billion cubic feet per day (Bcf/d) of incremental gas demand by 2030. The company estimates that the global natural gas demand is expected to grow to approximately 650 Bcf/d by 2050. As a large-scale, vertically integrated natural gas producer in the Appalachian Basin, EQT is well-positioned to capitalize on this increasing demand.

Increase in Natural Gas Prices: Natural gas prices have shown a notable uptick in recent quarters compared to the prior year levels. In its fourth quarter results, EQT reported that its average natural gas, including the impacts of cash-settled derivatives, came in at $3.76 per thousand cubic feet (Mcf), representing a rise of approximately 16% from the prior year level. As per the U.S. Energy Information Administration, Henry Hub spot natural gas prices are projected to average $5.69 per Mcf in the first quarter and $4.48 per Mcf in 2026, representing an increase from the 2025 levels. Healthy natural gas prices are expected to support earnings growth and an increase in free cash flow generation for EQT.

Strong Free Cash Flow Generation: EQT has consistently outperformed its free cash flow estimates over the past few quarters. In the fourth quarter, the company recorded strong free cash flows of approximately $750 million, attributable to EQT.  The company has generated more than $2.5 billion in cumulative free cash flow in 2025 at an average NYMEX natural gas price of just $3.40 per million British thermal units (Btu). The significant cash flow generation capabilities of the company underscore its strong operational and financial performance, which generates tangible returns for shareholders. The company expects its free cash flow levels to reach approximately $3.5 billion in 2026 at the recent strip pricing. The high free cash flow should provide resilience against market volatility and support long-term shareholder returns, while enabling the company to capitalize on high-return growth opportunities.

Headwinds to Consider

Hedging Strategy: EQT plans to keep a majority of its natural gas production for 2026 and beyond unhedged. Particularly, beyond the first quarter, EQT intends to keep only 20% of its production hedge to take advantage of price upsides. While this decision could prove to be beneficial if natural gas prices strengthen, it is worth noting that oil and natural gas prices are highly volatile depending on several factors. Hedging allows producers to fix prices beforehand, thereby ensuring revenue stability in case of price downturns. Keeping a significant portion of its production unhedged increases EQT’s exposure to price declines, which may impact its cash flows in the case of volatility.

Material Increase in Operating Expenses: EQT’s total operating expenses increased to $5.4 billion in 2025 compared with $4.6 billion in 2024. Operating and maintenance costs have more than doubled compared to the prior year levels. This increase may put pressure on the company’s profitability and partially offset the benefits of higher production and better prices.

Increasing Prominence of Renewables Poses Long-Term Risks: The growing prominence of renewables in the energy landscape, like solar and wind power for electricity generation as an alternative to traditional fossil fuels, poses risks for exploration and production players like EQT. The global shift toward renewable energy sources to improve the sustainability of the energy sector is gaining momentum. The broader energy transition may limit the use of traditional fossil fuels, thereby pressuring EQT’s volume growth in the long run.

Final Remarks

EQT benefits from the rising demand for natural gas driven by the rise in data centers and artificial intelligence, healthy natural gas prices, and strong free cash flow generation. Its hedging strategy and increasing expenses pose risks to its financial performance. The increasing shift toward renewables raises concerns. Hence, it is recommended to exercise caution with this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Antero Resources Corporation, carrying a Zacks Rank #3, is one of the leading natural gas and natural gas liquids (NGL) producers in the United States. The company boasts more than 20 years of premium, low-cost inventory in the Appalachian Basin, primarily in West Virginia and Ohio.

Range Resources Corporation is one of the top 10 natural gas producers in the United States, primarily operating in the prolific Appalachian Basin. It currently has a Zacks Rank #5 (Strong Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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