Freedom cut EQT’s target price to $77 while maintaining a “Buy” rating

EQT Corporation’s (NYSE: EQT) third-quarter earnings came in above market expectations despite lower gas sales. Freedom Broker analysts maintain a positive view on the company but cut the target price from $81 to $77, factoring in the acquisition of Range Resources and updated commodity price forecasts. The “Buy” recommendation has been reaffirmed.

EQT is a U.S. natural gas producer operating in the Appalachian Basin. In addition to production, it develops gas gathering and transportation infrastructure. Relative to the $56.27 price used in Freedom’s report, the new target implies upside potential of about 36.8%.

Earnings beat expectations even as sales declined

EQT’s third-quarter revenue fell 9.6% year over year to $1.8 billion, roughly in line with consensus. Sales volume declined 8.1% to 582.8 Bcfe (billion cubic feet of gas equivalent), a unit that allows different types of hydrocarbons to be compared.

The decline was largely planned: the company curtailed production by 21 Bcfe to avoid selling gas at a wider regional price discount to the U.S. benchmark Henry Hub. Sales nevertheless remained within management’s guidance range.

Adjusted net income totaled $261.4 million—down 20.4% from a year earlier, but up 7.3% from the prior quarter. Adjusted earnings per share reached $0.42, beating market expectations by 14.4%. The company disclosed key operating metrics in its quarterly report. EQT Reports Third Quarter 2026 Results

Combination with Range Resources will increase the business scale

After the quarter ended, EQT agreed to acquire Range Resources. The deal will be paid entirely in stock: holders of each Range Resources share will receive 0.987 shares of EQT.

Production of the combined company will exceed 9 Bcfe per day, making it the largest natural gas producer in the U.S. Closing is expected in Q1 2027 following receipt of the necessary approvals. 

Freedom sees the main value of the deal in the proximity of the companies’ assets. This will enable joint drilling planning, use of EQT’s pipeline infrastructure, and cost reductions. Management expects to realize an annual synergy benefit of $325 million within two years.

At the same time, EQT’s share count will increase by about 37%. Therefore, for growth in earnings and cash flow per share, it is important that the expected savings are actually achieved.

Previously, Freedom viewed the Range Resources deal positively, keeping the $81 target until the model update. Now analysts have incorporated the combination into EQT’s valuation.

Company reduces debt and raises the dividend

According to Freedom’s estimates, capital expenditures for the quarter came in below forecast. EQT lowered its full-year capex guidance from $2.725 billion to $2.67 billion thanks to operational efficiency and lower spending on production and infrastructure.

Net debt decreased by $69 million over the quarter to about $5.5 billion. The board of directors also increased the quarterly dividend by 3% to $0.17 per share. The payment is scheduled for December 1, 2026. On an annualized basis, the dividend is $0.68 per share—about 1.2% of the price used in the analysis.

Why the target price was lowered

Freedom’s updated valuation reflects the combination with Range Resources and revised assumptions for hydrocarbon prices. The $77 target is calculated using discounted future cash flows.

Upside potential remains, but achieving the scenario depends on gas prices, deal closing, and delivering the planned savings after the merger.

This is not an individual investment recommendation.