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EQT Corporation (NYSE:EQT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company’s business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 7.0% over the past week, closing at US$37.52. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
After the upgrade, the consensus from EQT’s twelve analysts is for revenues of US$4.3b in 2022, which would reflect a stressful 47% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$3.7b in 2022. It looks like there’s been a clear increase in optimism around EQT, given the nice gain to revenue forecasts.
View our latest analysis for EQT
We’d point out that there was no major changes to their price target of US$53.68, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on EQT, with the most bullish analyst valuing it at US$89.00 and the most bearish at US$40.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EQT’s past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 57% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 14% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 4.5% per year. The forecasts do look bearish for EQT, since they’re expecting it to shrink faster than the industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They’re also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Seeing the dramatic upgrade to this year’s forecasts, it might be time to take another look at EQT.
Better yet, EQT is expected to break-even soon – within the next few years – according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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