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Forbes
4 days ago
- Business
- Forbes
What's Happening With EQT Stock?
Photo byEQT Corp (NYSE: EQT) has re-entered the limelight—but not in the manner investors desired. Shares of the most significant natural gas producer in the U.S. plummeted nearly 12% over the past five days, significantly trailing the broader energy sector. The primary reason? A 7% decrease in natural gas futures, driven by predictions of cooler-than-anticipated weather, high storage levels, and consistent production strength. Although EQT's Q2 2025 earnings exceeded expectations on EPS, the company fell short on revenue, and pipeline bottlenecks along with limited hedging left it vulnerable to price fluctuations—reducing the upside from $340 million in free cash flow. Natural gas producers such as EQT are extremely responsive to commodity fluctuations, and when prices drop, their stock prices often decline rapidly. EQT's decrease was one of the steepest in the sector. Competitors like Coterra Energy (NYSE: CTRA) and Expand Energy (NASDAQ: EXE) fell by 3% and 9%, respectively, but EQT's exposure to spot prices and pipeline limitations exacerbated the selloff. Nonetheless, if you seek upside with a smoother journey than investing in individual stocks, consider the High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception. What Caused the Decline? A Perfect Storm for Natural Gas Three major factors contributed to the steep drop in natural gas prices. Firstly, record-breaking U.S. production coupled with larger-than-anticipated storage injections indicated a growing supply surplus. Secondly, predictions of milder-than-usual weather diminished expectations for power-sector demand. Thirdly, reduced global LNG demand—especially from Asia and Europe—resulted in more gas being confined to the domestic market. This mixture of oversupply, weakening demand, and negative sentiment in the futures market created a perfect storm, leading to lower prices and dragging EQT stock down alongside them. Valuation: EQT Appears Expensive Its price-to-sales ratio is at 4.2x, higher than the S&P 500's 3.1x, while its price-to-free cash flow stands at 26.8x compared to the index's 20.9x. Additionally, EQT's price-to-earnings ratio is 27.4x, in contrast to the 26.9x for the wider market. These heightened multiples indicate that the stock is priced at a premium—an increasingly difficult proposition given the increased volatility in natural gas prices and the cyclical characteristics of the energy sector. Growth: A Positive Aspect, but Risks Persist EQT's strongest argument resides in its growth trajectory. The firm has demonstrated notable top-line expansion, with average revenue growth of 6.4% over the last three years, surpassing the S&P 500's 5.5%. Over the past year, revenue skyrocketed 39.6%, increasing from $4.5 billion to $6.3 billion. Most impressively, quarterly revenue surged 170% year-over-year, jumping from $952 million to $2.6 billion. These achievements are hard to ignore—but they bring up the question of sustainability if natural gas prices remain low. On the profitability side, EQT presents a mixed picture. Its operating margin of 21.6% is strong, and its operating cash flow margin of 53.9% significantly exceeds the S&P 500 average of 14.9%, underscoring the robustness of its core operations. However, the net income margin is only 5.8%, considerably lower than the S&P's 11.6%, reflecting the burden from high depreciation, hedging costs, and other non-cash expenses. The company's balance sheet reveals some concerning signals. EQT carries $8.3 billion in debt against a $34 billion market capitalization, resulting in a moderate debt-to-equity ratio of 24.4%, which is above the S&P 500's 19.4%. More worryingly, the company's liquidity is limited—holding only $555 million in cash on $40 billion in total assets, leading to a weak cash-to-assets ratio of 1.4%. That kind of thin cash reserve could present challenges during a downturn or if gas prices continue to face pressure. How Resistant Is EQT in a Crisis? EQT has historically lagged during market downturns, frequently declining more sharply and recovering more slowly than the wider market. It dropped 43% during the 2022 inflation shock (compared to 25.4% for the S&P 500), 54.5% in the 2020 COVID crash (versus 33.9%), and 69.5% in the 2008 financial crisis (against 56.8%), taking almost five years to recover from the latter. This pattern underscores EQT's susceptibility during periods of market stress. A Smarter Strategy for Engaging with the Market EQT showcases impressive growth and cash flow, but its weak balance sheet, mediocre profitability, and subpar performance in downturns raise concerns. Given its premium valuation and susceptibility to gas prices, the stock carries considerable downside risk despite its potential for upside. Investing in a single stock can be hazardous. You may want to consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to deliver strong returns for investors. How is this possible? The quarterly rebalanced mixture of large-, mid- and small-cap RV Portfolio stocks offered an adaptive approach to maximize opportunities during favorable market conditions while mitigating losses when markets decline, as outlined in RV Portfolio performance metrics.
CNBC
21-07-2025
- Business
- CNBC
Best Stocks: What to do with two 'Best Stock' names that are failing
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — We're writing up stocks here all the time and doing our best to identify set-ups with either a strong ongoing trend, a technical catalyst on the horizon or something fundamental we think deserves exploring. While many of our stock write-ups have resulted in singles and doubles so far this summer, they don't all cooperate. Today, we're going to follow up on two names we've recently talked about that are still on the list, but in danger of falling off. The goal of this exercise is to share the other side with you — when Best Stocks fall off. But first, let's check in on where the list stands today. Sector Leaderboard As of 7/21/2025, there are 142 names on The Best Stocks in the Market list. Top Sector Ranking: Top industries: Top 5 Best Stocks by Relative Strength: Spotlight: Sean — Market breadth measures how many stocks are participating in a market move, offering a deeper view of underlying strength beyond index-level performance. It's a look under the hood to see what's powering the market. When breadth is strong — meaning a large number of individual stocks are advancing, or are above a certain moving average, or have a certain indicator/reading — it signals broad investor confidence and healthy market participation, not just gains concentrated in a few large names. Market-wide participation reduces the risk of fragility in the rally and suggests that momentum is sustainable. Strong breadth has historically aligned with bull markets, making it a bullish signal for investors tracking the durability of uptrends. While strong breadth points to a healthy market, it doesn't mean every stock is firing on all cylinders. Identifying laggards during a broad uptrend can be just as insightful as spotting the leaders. By examining the names that remain on our watchlist but are no longer showing ideal technical set-ups, we can better understand where momentum may be fading — or where risks are quietly building. We thought it would be interesting to see what names are still on the list, but technically are not setting up the way we'd like. Both of these names we mentioned in an earlier piece, and both recently broke below their 50-day moving averages. Expand Energy This is a 1-year chart of Expand Energy Corp (EXE) : We mentioned this on May 22, noting some fundamentals on the stock. It is one of the largest natural gas producers in the U.S. The stock broke through its 50-day moving average to start July and nearly tumbled to its 200-day moving average for the first time since the election. If this stock breaks below its 200-day, which is around the bottom level of support it's been building in the $100 range, the stock will have some further downside risk. Risk Management: Josh here — Above I am showing you the highly correlated peak for EXE stock and the spot natural gas price. Nat gas is down over 12% over the last month while crude oil is off 8%. This weakness in the underlying commodity prices has affected stocks like EXE across the sector. The recent firming up in energy commodity prices should enable Expand to hold its rising 200-day support level just above $100 per share. Both Mizuho and UBS have recently reiterated price targets in the 140s. For investors, I would leave it on this leash, checking back at the end of every week. Shorter-term traders should already be out of the name, watching from the sidelines to see if it sets up again. Momentum is almost washed out at a 40 RSI but it's not completely de-risked. Deere & Co Sean — Below is Deere (DE) , a stock we mentioned on June 5, with one of my favorite titles thus far: "An 'AI wolf in sheep's clothing' with a great entry point for investors": Similar to EXE, the stock broke below its 50 day moving average, and is threatening the support it's been building since it broke out this spring. Risk Management: Josh here — Deere deserves the benefit of the doubt given the recent pullback has not gotten anywhere near the rising 200-day but it bears watching. The company will report earnings on Wednesday morning August 13th before the market opens. The stock rallied hard after its last report despite giving relatively tame guidance, making an all-time high at $528 before pulling back. Tariffs are still a concern here and should the rhetoric from the White House continue to ratchet up, they may continue to sell this name. Shorter-term traders may want to watch from the sidelines rather than battle against the sellers. Taken together, these technical breakdowns in names like EXE and DE serve as reminders that even in broadly healthy markets, not every stock is participating. The optimistic take is, if we can see support in these names, these could be buying opportunities, but we have to let price dictate that. Monitoring these minor breakdowns alongside market leaders helps investors separate structural strength from surface-level momentum. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
Yahoo
17-07-2025
- Business
- Yahoo
Can Expand Energy (EXE) Keep the Earnings Surprise Streak Alive?
Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Expand Energy (EXE), which belongs to the Zacks Alternative Energy - Other industry. This oil and gas company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 6.48%. For the most recent quarter, Expand Energy was expected to post earnings of $2.02 per share, but it reported $1.85 per share instead, representing a surprise of 9.19%. For the previous quarter, the consensus estimate was $0.53 per share, while it actually produced $0.55 per share, a surprise of 3.77%. Price and EPS Surprise For Expand Energy, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Expand Energy currently has an Earnings ESP of +0.43%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss. Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Expand Energy Corporation (EXE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
15-07-2025
- Business
- Yahoo
What to Expect From Expand Energy's Next Quarterly Earnings Report
Oklahoma City-based Expand Energy Corporation (EXE) operates as an independent natural gas production company in the United States. With a market cap of $25.1 billion, the company engages in the acquisition, exploration, and development of properties to produce oil, natural gas, and natural gas liquids. The energy major is expected to announce its second-quarter results on Monday, Aug. 4. Ahead of the event, analysts expect EXE to deliver a profit of $1.32 per share, significantly up from the $0.01 per share reported in the year-ago quarter. While the company has missed the Street's bottom-line estimates in one of the past four quarters, it has surpassed the projections on three other occasions. Palantir Just Launched Warp Speed for Warships. Does That Make PLTR Stock a Buy? This Analyst Just Doubled His Price Target on AMD Stock How High Can Nvidia Stock Go as Jensen Huang Heads to China? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! For the full fiscal 2025, analysts expect EXE to deliver an EPS of $7.41, up from $1.41 reported in fiscal 2024. Further, in fiscal 2026, its earnings are expected to surge 46.6% year-over-year to $10.86 per share. EXE stock has soared 31.3% over the past 52 weeks, notably outperforming the S&P 500 Index's ($SPX) 11.6% gains and the Energy Select Sector SPDR Fund's (XLE) 2.6% dip during the same time frame. Expand Energy's stock prices dropped 3.3% in the trading session following the release of its Q1 results on Apr. 29. The company operated an average of 11 rigs during the quarter, drilling 46 wells and turning 89 wells in line, which significantly boosted its top-line performance. Despite the $1 billion loss due to derivatives, its topline increased 103.1% year-over-year to $2.2 billion. Meanwhile, its non-GAAP net income grew from $80 million in Q1 2024 to $487 million, and its non-GAAP EPS of $2.02 per share surpassed the consensus estimates by 9.2%. However, its non-GAAP net income included an adjustment of $969 million for unrealized losses on natural gas and oil derivatives, and on a GAAP basis, the company reported net losses of $249 million, which likely failed to impress investors. Among the 26 analysts covering the EXE stock, the consensus rating is a 'Strong Buy.' That's based on 22 'Strong Buys,' two 'Moderate Buys,' and two 'Holds.' Its mean price target of $131.62 suggests a 20.1% upside potential from current price levels. On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-07-2025
- Business
- Yahoo
Investing in energy stocks? One name to avoid & one to check out
The latest edition of Good Buy or Goodbye focuses on the energy sector. Hennessy Energy Transition Fund portfolio manager Ben Cook explains why Expand Energy (EXE) is a stock to consider and Occidental Petroleum (OXY) could be one to say goodbye to. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Welcome to goodbye or goodbye. Our goal here helping you cut through the noise to navigate the best moves for your money. I'm here with Hennessy Energy transition Fund portfolio manager. That would be Ben Cook. Ben, welcome to the show. Let's get you going here with your buy. We're going to start there. Now this is name expand energy. It's up about 7% this year, Ben. I would say most of the analyst on the street, Ben, about 90% who cover this name, they they tell their clients this is a buy. Can actually zero sell. So you're in good company. Let's run through the list of reasons, Ben. You say it is a smart place to commit capital. The first reason, geographically advantage, walk us through what you mean by that. Yeah, thanks for having me, Josh. You know, we believe that Expand Energy has an advantage set of assets located primarily in Northwest Louisiana. That's in close proximity to where we see much of the growth in LNG export capacity over the next several years. They'll benefit from higher production as well as better pricing because of that asset footprint. All right, and second reason, benefiting from lower leverage. Yeah, Expand was formed last year with the merger between Chesapeake Energy and Southwestern Energy. And since that time, they've done a good job at reducing their leverage. They're now embarking on a a production growth phase where they're able to, because of that lower leverage, spend more money and that's going to benefit them longer term. Final reason you say this one's a buy, Ben, significant free cash generation. Yeah, the company's articulated a cash return profile to investors that's extremely attractive to us. They pay a base dividend, they're going to be paying down debt and they're going to be paying a variable dividend and repurchasing shares as well. So now you made a good case, Ben, but before folks all pile in, right? Remind people, what are some downside risks you think they need to consider? Yeah, we see some significant tailwinds to natural gas demand growth over the next several years. If there's any kind of change to that picture, that could pose a risk to expand energy. Part of that would be a change to the LNG export outlook here from the United States or any kind of deviation from the strong trend we're seeing from AI power demand for natural gas. All right, so that's your buy. Let's move on to a name you would avoid, Ben. That would be Occidental petroleum. This one is down about 10% year to date. You still still want to avoid. Go through the reasons there. One, crude oil production waiting challenge. Yeah, as as as the market might well knows, this is a company that's that's grown through merger and has has grown its oil production by the acquisition of Anadarko petroleum in 2019, and again, Crown Rock last year. Companies waiting towards oil production is roughly 52%, which is higher than its peers, and we think that could create some headwinds given the headwinds to oil prices here over the next six months. Second reason, significant leverage waiting. Yeah, as I mentioned, you know, the acquisitions that the company has undertaken over the last several years has has resulted in above average leverage. And as a result, they're required to really the market wants to see them pay down that debt before they start returning significant significant cash levels to investors. And third and final reason you say this wanted to avoid Berkshire Hathaway's large stake. Yeah, the name Berkshire Hathaway is generally associated with a bullish outlook on a stock. Berkshire owns roughly 28% of the common shares and they own a significant preferential issue as well. Obviously a succession issue at Berkshire Hathaway, Greg Abel coming in from for Warren Buffett's seat. Any kind of communication that would suggest less interest in the equity, we think would be an create an overhang on Occidental stock. All right, now before you avoid it though, what would be the upside risk you got to think about? Yeah, great question. Obviously any any move that would support a higher move to the crude oil price would be beneficial for Occidental. So we we'll be watching for any kind of change in crude fundamentals over the next six months. All right, so there is a buy expand energy, avoid Occidental petroleum, Ben, great to see you. Thank you, sir. Thank you very much. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
