DCF Studio

    EQT · NYQ · Energy

    EQT Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 13.19

    Market price

    USD 50.00

    Implied upside

    -73.6%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 13.19-73.6%
    Exit multiple
    USD 18.62-62.8%
    Market price
    USD 50.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 7.4bnUSD 6.5bnUSD 5.7bnUSD 5.1bnUSD 4.5bn-11.7%
    EBITUSD 2.2bnUSD 1.9bnUSD 1.7bnUSD 1.5bnUSD 1.3bn-11.7%
    NOPATUSD 1.8bnUSD 1.5bnUSD 1.4bnUSD 1.2bnUSD 1.1bn-11.7%
    Add depreciation & amortisationUSD 2.2bnUSD 2.0bnUSD 1.7bnUSD 1.5bnUSD 1.4bn-11.7%
    Less capital expenditureUSD -2.2bnUSD -2.0bnUSD -1.8bnUSD -1.5bnUSD -1.4bn-11.7%
    Less increase in working capitalUSD 71.9mUSD 63.5mUSD 56.1mUSD 49.5mUSD 43.7m+11.7%
    Free cashflow to firmUSD 1.8bnUSD 1.6bnUSD 1.4bnUSD 1.2bnUSD 1.1bn-11.7%
    Discount factor0.96240.89140.82570.76480.7084-
    Present valueUSD 1.7bnUSD 1.4bnUSD 1.2bnUSD 947.9mUSD 775.1m-18.2%
    Present Value Of The ForecastUSD 6.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.716Reported 0.576, pulled toward 1.0 (Blume)
    Cost of equity8.94%Risk-free + beta x equity risk premium
    Cost of debt5.09%Interest expense / average total debt
    Market capitalisationUSD 31.3bn79.9% of capital
    Total debtUSD 7.9bn20.1% of capital, book value as a proxy
    Tax rate19.7%Effective, capped at statutory
    WACC7.96%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 13.19

    62% of EV

    Forecast FCFF, final year
    USD 1.1bn
    Capex at depreciation, working capital in reinvestment
    USD 1.1bn
    Less reinvestment at g/ROIC (31.4% of NOPAT)
    USD -338.7m
    Capitalised
    USD 740.0m
    ROIC (WACC floor)
    8.0%
    Terminal value, undiscounted
    USD 13.9bn
    Terminal value, discounted
    USD 9.8bn
    Enterprise value
    USD 15.9bn
    Less net debt
    USD 7.7bn
    Equity value
    USD 8.1bn

    Exit at 7.0x EBITDA

    Value per shareUSD 18.62

    69% of EV

    Terminal value, undiscounted
    USD 18.6bn
    Terminal value, discounted
    USD 13.2bn
    Enterprise value
    USD 19.2bn
    Less net debt
    USD 7.7bn
    Equity value
    USD 11.5bn

    Spread between methods: 34%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.96%20.5920.7120.8220.9321.05
    6.96%16.2816.3716.4616.5516.65
    7.96%13.0313.1113.1913.2713.35
    8.96%10.5110.5810.6410.7110.78
    9.96%8.498.558.608.668.72

    Outlined: this model. Green text: above today's price of 50.00. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-11.7%9.1%+20.8pp
    EBIT margin29.6%72.6%+43.1pp
    Discount rate8.0%4.0%-4.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.