EQT Corporation (EQT): Among Steven Cohen’s Mid-Cap Stock Picks with Huge Upside Potential

EQT Corporation, a leading Appalachian natural gas producer, has emerged as a standout holding in billionaire Steven Cohen’s portfolio, highlighted in recent Point72 Asset Management filings. With a strategic focus on low-cost production and midstream integration, EQT is positioned to capitalize on surging U.S. natural gas demand, LNG exports, and industrial growth. Let’s dissect why this mid-cap energy stock could deliver outsized returns in 2025 and beyond.

Q1 2025 Results: A Record Quarter of Execution

EQT’s first-quarter performance underscored its operational excellence. The company generated $1.0 billion in free cash flow, nearly doubling consensus estimates, while reducing net debt to $8.1 billion—a 10% drop from year-end 2024 levels. Production hit the high end of guidance at 581 Bcfe, driven by minimal operational disruptions and winter demand surges.

Strategic Acquisitions Fuel Growth

The $1.8 billion acquisition of Olympus Energy’s upstream and midstream assets marks EQT’s boldest move yet. This deal adds 500 MMcf/d of production and 90,000 net acres, directly adjacent to EQT’s existing operations. Pro forma metrics are compelling:
- A 3.4x adjusted EBITDA multiple, well below industry averages.
- 4–8% free cash flow accretion over three years at natural gas prices between $2.50–$5/MMBtu.
- Extended inventory life to 10+ years in the Marcellus and 7 years in the Utica, ensuring low-decline production.

The Olympus deal is 90% equity-financed, minimizing cash outflows and preserving EQT’s financial flexibility.

Why Steven Cohen is Betting Big

Cohen’s $205 million stake in EQT (Q4 2024) reflects confidence in its low-cost structure ($2.35/MMBtu levered break-even) and strategic positioning in a tightening natural gas market. Key tailwinds include:
1. U.S. LNG Export Growth: EQT’s proximity to export terminals and in-basin industrial projects (e.g., power plants, data centers) positions it to capture $600 million in annual free cash flow by 2028 as price differentials narrow to $0.30/MMBtu.
2. Supply Constraints: Permian and Haynesville shale output faces headwinds from OPEC oil pricing and tariffs, creating a supply-demand imbalance that could push U.S. gas prices higher.
3. Debt Reduction: EQT aims to slash net debt to $5.0 billion by mid-2026, unlocking capital for dividends or buybacks.

Risks and Considerations

• Economic Uncertainty: A prolonged recession could dampen industrial demand or LNG exports.
• Execution Risk: Integrating Olympus’s assets and securing long-term supply contracts require flawless execution.

Valuation and Upside Potential

At current prices, EQT trades at a 1.5x EV/EBITDA multiple, significantly below its historical average. With $1.0 billion in quarterly free cash flow at modest gas prices ($3.65/MMBtu), the stock could revalue sharply if prices rise to $4–5/MMBtu—a scenario management deems likely by 2026.

Conclusion: A Rare Combination of Strength and Opportunity

EQT Corporation combines defensive cash flows, strategic acquisitions, and exposure to secular energy trends to create a compelling investment case. Its ability to generate $1.0 billion in free cash flow in a single quarter—despite a muted gas price environment—demonstrates operational resilience. With a debt-reduction roadmap, a $600 million tailwind from firm sales agreements, and a 15% unlevered free cash flow yield on the Olympus deal, EQT is primed to outperform peers in 2025.

For investors seeking a mid-cap energy play with hidden synergies and Cohen’s imprimatur, EQT Corporation is a stock to watch closely.

Data as of Q1 2025 filings and Point72 13F reports.