Bernstein initiates EQT with an Underperform, two others with Market Perform

Bernstein analyst Jean Ann Salisbury initiated coverage of EQT Corporation (EQT) with an Underperform rating and a price target of $30, and Antero Resources (AR) and Range Resources (RRC) with Market Perform ratings and price targets of $29 and $32, respectively. The firm believes that going forward, having pipeline capacity to the right markets will be critical for E&P success. Bernstein is bearish versus the strip on gas, which is what it thinks is embedded into E&Ps. No more pipelines except MVP will be built out of Appalachia, meaning in-basin pricing will deteriorate vs expectations due to seasonally trapped gas, the firm notes, adding that Mountain Valley Pipeline is “not as good as people think at start.” Bernstein prefers NGL exposure to gas exposure, particularly international propane and butane, as it believes prices are at their troughs versus crude and should slowly recover as PE demand comes back. However, in 2024 this is offset by likely tightness in U.S. LPG export capacity.