Oil equities are performing well this year, but it’s a different scenario with natural gas stocks. That makes sense because natural gas is notoriously volatile.
Recently, natural gas prices retreated due to rising inventories and declining exports (the U.S. is the largest exporter), among other factors. So it’s not surprising that some natural gas equities are struggling. Down 15.1% for the month ending June 18 and 25.7% below its 52-week high, EQT (EQT 0.67%) is part of that dubious group.
EQT is a battered natural gas stock, but its punishment may be too harsh. Image source: Getty Images.
Price action like that may imply that this integrated natural gas producer is a falling knife or a name to be ignored. Still, there are reasons why investors may want to put this energy stock on their watch lists, because EQT’s slump may be a sign that market participants are overlooking an appealing fundamental story.
Examining EQT rebound potential
EQT is one of the leading natural gas producers in the Appalachian Basin, with enviable positioning in Ohio, Pennsylvania, and West Virginia. It differs from competitors in that 90% of its output is dry natural gas, so it’s prone to that commodity’s wide price swings. So this isn’t a stock for the faint of heart, but there are some sources of allure.
The company reintegrated its Equitrans midstream unit, resulting in a 15% reduction in net unit costs. Some experts view it as a shrewd move because, now that EQT is a more integrated energy company, it can realize pricing across its various service areas while enhancing its earnings potential.
The reintegration of Equitrans speaks to another important point about EQT, one that’s often missing with some exploration and production oil stocks. The company is a master of production efficiency, as evidenced by a 13% drop in well costs in the first quarter. That and other efficiencies helped EQT generate $1.8 billion in free cash flow in that period.
Today’s Change
(-0.67%) $-0.34
Current Price
$50.79
Key Data Points
Market Cap
$32B
Day’s Range
$50.28 – $51.44
52wk Range
$48.47 – $68.24
Volume
319.8K
Avg Vol
7.6M
Gross Margin
49.33%
Dividend Yield
1.29%
Another consideration for patient investors is EQT’s potential to benefit from the artificial intelligence (AI) trade. These days, it feels as if most stocks are backdoor AI plays, but EQT’s thesis is viable. Its production area is close to the data center-rich Northeast Corridor. If utilities in the region invest more heavily in natural gas plants to meet power demand from data centers, EQT could benefit, provided those investments occur in areas the company’s pipelines reach.
Firming finances
It’s frustrating when a stock is in a bear market. Still, investors can save themselves some headaches by avoiding “junk” companies, those laden with debt and flimsy balance sheets. EQT, on the other hand, is rapidly erasing debt.
At the end of 2025, the energy company had $7.7 billion in outstanding liabilities, but that total was $5.7 billion at the end of the first quarter. That’s a “good” type of decline. Eliminating debt supports the EQT dividend, which has grown solidly in recent years.
For risk-tolerant traders with long-term views in search of an energy sector rebound candidate, there’s a lot to like with this natural gas producer.