AR, EQT: Will the Uptrend Sustain?
Stock Analysis & Ideas

AR, EQT: Will the Uptrend Sustain?

Story Highlights

Antero and EQT stocks have doubled in 2022 and made their investors rich. Moreover, favorable sector trends augur well for future growth.

The stocks of Antero Resources (NYSE:AR) and EQT Corp. (NYSE:EQT) doubled in 2022. (See the graph below. Meanwhile, higher demand, increased exports, and underinvestment in the sector will support higher prices, which in turn may drive these stocks higher. 

Is Antero Resources a Good Stock to Buy?

Despite the significant increase in its price, Antero stock commands a Moderate Buy consensus rating on TipRanks. It has five Buy and two Hold recommendations. Further, these analysts’ average price target of $50.29 implies 34% upside potential. 

Higher average realized prices, strong demand, access to premium-priced markets, and low leverage position Antero to deliver solid shareholders returns. It recently increased its share repurchase authorization by $1 billion, which indicates that the company will deliver significant free cash flows. 

Moreover, Antero has aggressively reduced its debt, which positions it well to return most of its free cash flows to its shareholders through dividends and share buybacks.

Further, AR stock is trading at a forward Enterprise Value/ EBITDA multiple of 4.8x, which is below its five-year average and sector median of 6.2x and 5.6x, respectively. 

Also, Antero stock has positive signals from hedge funds and retail investors. Moreover, it has a “Perfect 10” Smart Score on TipRanks. 

Is EQT a Buy, Sell, or Hold?

EQT is a leading natural gas producer in the U.S., and Wall Street analysts are bullish about its prospects. EQT has received 13 unanimous Buy recommendations for a Strong Buy consensus rating. Moreover, analysts’ average price forecast of $61.23 implies 40.6% upside potential.

The strong demand and higher average realized prices support the financials of EQT and drive its stock price. Moreover, its accelerated pace of debt reduction, share buybacks, and accretive acquisitions increase its appeal to shareholders and act as positive catalysts. 

EQT raised its 2023 year-end debt reduction target to $4 billion from $2.5 billion. Moreover, since December 2021, the company has reduced its fully diluted share count by more than 19 million.  

While analysts are optimistic about EQT stock, hedge funds and insiders have reduced their exposure. Our data shows that hedge funds sold 1.8M EQT stock last quarter. Meanwhile, insiders sold EQT stock worth $8.6M. Nevertheless, EQT stock has an Outperform Smart Score of eight. 

EQT stock is trading at a forward Enterprise Value/EBITDA multiple of 5.24, which is higher than AR stock but compares favorably to the sector median and its historical average. 

Bottom Line 

Antero and EQT stock have made their shareholders rich in 2022. Moreover, strong demand and higher prices augur well for future growth. Also, their focus on returning cash to their shareholders and low leverage are positives.



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