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Natural Gas Prices Drop Below $3; Is Trouble Ahead for AR and EQT?

Story Highlights

The U.S. natural gas price continues to trend lower due to unusual weather that is impacting demand. The decline in natural gas prices poses challenges for AR and EQT in the near term.

The continued pressure on U.S. natural gas has dragged its prices below $3/MMBtu (million British thermal units). The decline in natural gas prices will likely bring short-term challenges for Antero Resources (NYSE:AR) and EQT Corp. (NYSE:EQT), the producers of natural gas and NGL (natural gas liquids).

It’s worth highlighting that Antero Resources and EQT stocks skyrocketed in the first half of 2022. However, milder winter weather and higher domestic supply due to the outage at the LNG export plant dragged prices lower. Shares of these companies reversed a portion of their gains following the decline in natural gas prices. 

Earlier, Jeoffrey Lambujon of Tudor Pickering downgraded both AR and EQT to Hold, citing weak natural gas prices in 2023. 

Despite the muted outlook for natural gas prices in 2023, Wells Fargo analyst Roger Read and Nitin Kumar of Mizuho Securities (the top U.S. analyst for 2022) maintain a bullish outlook on both of these companies. However, they see short-term challenges from higher supply and lower prices. 

Against this backdrop, let’s check what TipRanks’ data indicates for AR and EQT.

What is the Prediction for Antero Resources?

Antero Resources stock has received five Buy and three Hold recommendations, translating into a Moderate Buy consensus rating. Furthermore, these analysts’ average price target of $41.71 implies 42.55% upside potential. 

While analysts are cautiously optimistic, hedge funds sold 2.8M shares of Antero Resources in the last quarter. During the same time, insiders sold AR stock worth $31.4M. Overall, on TipRanks, Antero has a Neutral Smart Score of four.

Is EQT a Buy or Hold?

Based on 10 Buys, three Holds, and one sell, EQT stock sports a consensus rating of Strong Buy. Meanwhile, the average price target of $52.10 implies 56.83% upside potential. 

Like Antero Resources, hedge funds and insiders lowered their exposure to EQT stockHedge funds sold 1.8M shares of EQT in three months. Meanwhile, insiders sold $8.6M worth of EQT stock. It carries a Neutral Smart Score of six.


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