- Buys
- 0 of 4
- Three are needed, so it stays out of the basket.
- Trailing free cash flow yield
- 10.8%
- $3.76B of free cash flow in the year to June 30, 2026, on a $34.80B market cap.
- Diluted shares, four fiscal years
- +90.5%
- From 323.2M in 2021 to 615.7M in 2025, against $610.51M of buybacks.
- Range holders' share of the combined company
- 27%
- All stock, at 0.987 EQT shares for each Range share.
Quality, decade-long holdingSound balance sheet and a real midstream, but per-share cash has not grown through the issuance.
Deep value, margin of safetyNormalised through the cycle, earnings support far less than the market cap.
Macro and reflexivityWaits for the October 27 results and the 10-Q before paying into a stack of events.
GrowthA cyclical growing by issuance; the midstream floor and the deal both need proof.
Session of October 26, 2026. All four seats answered. This is the committee's first review of EQT Corporation.
Bottom line
EQT throws off a lot of cash, and no seat disputes it. The dispute is how much of it belongs to one share, and today's deal makes that harder to answer.
Our arithmetic says the market cap holds even if trailing free cash flow shrinks a few percent a year for a decade. Three of four seats still put year-three free cash flow below what the price needs, because they treat the trailing year as near the top of a gas cycle.
The first test is close: third-quarter results land after the market closes on October 27, 2026, and the 10-Q follows by November 9. The export end of this gas market sat before the committee in our Cheniere review.
The business in 60 seconds
EQT drills for natural gas in the Appalachian Basin and owns much of the pipe that moves it. Upstream, the gas itself, made up 83% of segment revenue in the first half of 2026 and 74% of segment operating income, at a 37.7% margin. Gathering ran at 64.3% and transmission, under federally approved tariffs, at 69.1% (10-Q, filed July 22, 2026). It calls itself "the lowest-cost natural gas producer in the industry" (Exhibit 99.1, October 26, 2026), an unaudited claim.
Substantially all of its assets sit in that one basin, in its own words (10-K Item 1A, filed February 18, 2026), and so do Range's.
No holder controls EQT. The proxy lists Vanguard at 12.0%, a passive filer, then BlackRock at 6.5% and State Street at 5.4% (DEF 14A, filed February 26, 2026). One share class.
| Fiscal year | Revenue | Operating margin | Free cash flow | Diluted shares |
|---|---|---|---|---|
| 2021 | $6.8B | -20.6% | $607.3M | 323.2M |
| 2022 | $12.1B | 22.3% | $2.1B | 406.5M |
| 2023 | $5.0B | 46.0% | $1.2B | 413.2M |
| 2024 | $5.3B | 12.9% | $573.3M | 514.6M |
| 2025 | $8.6B | 37.6% | $2.84B | 615.7M |
10-K rows via SEC EDGAR. Margins before 2025 are our division of rounded filed figures. Revenue includes derivative gains and losses.
What changed
- An all-stock merger with Range Resources. Closing needs both shareholder votes, antitrust clearance and an effective S-4, and is expected in the first quarter of 2027 (8-K Item 1.01, filed October 26, 2026). EQT owes Range $1,148M in specified circumstances; Range owes EQT $423M.
- The company's case. Exhibit 99.1 claims $325M of base annual synergies within two years, a breakeven below $2 per MMBtu, and about $20B of free cash flow over five years "at recent strip pricing". All of it is non-GAAP projection.
- A weak June quarter. Revenue fell 29.2% and operating income 65.3%. Upstream operating income fell 89.1% to a 6.6% margin while the pipe segments grew (10-Q, filed July 22, 2026).
- New debt. On October 7, 2026, EQT filed an 8-K for a notes agreement. Amount and terms could not be read.
- The neighbours split. Expand Energy's June-quarter operating income fell 47.9% (10-Q, filed July 28, 2026) while Antero's rose 83.3% (10-Q, filed July 29, 2026).
The bull case on EQT
- The cash is real. Free cash flow was positive in all five years on file, even in 2021's operating loss.
- There is a toll road inside. When upstream fell to a 6.6% margin in June, gathering held 63.5% and transmission 65.9%, and both grew.
- The balance sheet is modest. Net debt was $5.54B at June 30, 2026, and liabilities ran at 0.5x equity. Range brings $867.09M of long-term debt (10-Q, filed July 21, 2026), and no cash changes hands.
- Synergies make the deal roughly even. On Investor A's arithmetic, holders come out slightly behind without them and slightly ahead with them.
This half resembles a toll road, and it is the most durable thing EQT owns.
Investor A, Watch, on gathering and transmission
EQT will generate baseline free cash flow even in trough pricing environments, transforming its earnings quality.
Investor D, Watch, on what the market may miss if the deal delivers
The bear case on EQT
- The company doubled; the owner's slice did not. Investor A works free cash flow per diluted share at about $5.17 in 2022 and about $4.61 in 2025, two strong years.
- The trailing year flatters. Five-year average free cash flow is about $1.46B, our arithmetic from the filed rows.
- Range costs more equity than it brings income. Investor C puts Range at about 24% of combined trailing net income, bought with about 27% of the equity.
- The fees lean against EQT. EQT's break fee is nearly three times Range's.
The investment question is whether recent cash generation survives maintenance needs and a weaker commodity environment. Merger scale alone does not answer that question.
Investor B, Avoid
the discipline is in the drillbit, not the register.
Investor C, Watch, on capex below depreciation while the share count kept rising
Where the committee splits
Three Watches and one Avoid: the split is over which number is real, not direction.
Is $3.76B of free cash flow a run rate or a peak?
| Position | Seats | The figure it rests on |
|---|---|---|
| Peak, normalise down | A, B | Five-year history: $573.3M in 2024 |
| Hedge noise, test first | C, D | Pipe margins of 63.5% and 65.9% in the June quarter |
What settles it. Upstream operating margin for the quarter to September 30, 2026. Investors A and C both draw the line at 10%, in the 10-Q due by November 9, 2026. Investor D adds a 50% floor under the combined pipe margin.
From the chair, to Investor B. Your normalised earnings average a 2021 loss from a company with about half today's share count. What does the same method give on a per-share basis?
From the chair, to Investor D. Your critical environment is gas below $2, and the company claims a breakeven below $2. Which reported line would show that claim failing?
Does Range add value per share?
| Position | Seats | The figure it rests on |
|---|---|---|
| Neutral, only with synergies | A, C | Range trailing net income $860.35M against EQT's $2.71B |
| No credit until proven | B, D | $325M of synergies, a company projection |
What settles it. Free cash flow per diluted share in the 2026 10-K against 2025, then the synergy run rate against $325M two years after closing.
From the chair, to Investor A. Your bear case assumes $0.6B to $1.2B of free cash flow while you put the midstream alone near $1.24B pretax a year. What upstream result does that require?
From the chair, to Investor C. Your base case is the combined company. On the 73% existing holders keep, does it still clear what today's market cap needs?
| Investor | Verdict | What breaks its thesis |
|---|---|---|
| A | Watch 6 | To Avoid on upstream margin below 10% or a cash loss in the September quarter, or 2026 per-share free cash flow below 2025 |
| B | Avoid 7 | Toward Watch only if normalised net income reaches $3.48B by the 2028 10-K |
| C | Watch 6 | Upstream below 10% again in September; an HSR second request; high-yield spread at 5.00% for a month. Glut means Avoid, tightness Buy |
| D | Watch 7 | Pipe margin below 50%; pro forma shares above 875M; debt above $9.00B after closing. Sub-$2 gas means Avoid |
Valuation
What the price requires. This is the desk's arithmetic, which the seats did not see. At 9.46%, the 10-year yield plus 4.5 points, the market cap holds if trailing free cash flow falls 4.4% a year for ten years and then grows 3%. Year three on that path is $3.29B. At 8.46% the allowed decline is 6.3% and year three is $3.09B; at 10.46% it is 2.6% and $3.47B. On enterprise value of $40.3B the trailing yield is 9.3%, against 4.96% on the 10-year. We keep the trailing base; stock compensation is only 0.7% of revenue, though the company's own definition also deducts joint venture contributions.
Hurdles are our arithmetic on today's standalone market cap. Investor C's figure includes Range.
| Investor | Bear | Base | Bull | Weighted, year 3 | Against the price |
|---|---|---|---|---|---|
| A | 30%, $0.6B to $1.2B | 50%, $2.0B to $2.8B | 20%, $3.5B or more | $1.88B to $2.46B | below the band |
| B | 35%, $0.4B | 45%, $1.2B | 20%, $3.2B | $1.32B | below the band |
| C | 25%, $1.0B | 55%, $4.5B | 20%, $5.5B | $3.83B | above the band |
| D | 25%, $0.8B | 50%, $2.5B | 25%, $4.5B | $2.58B | below the band |
A's ranges are printed as given; its bar uses the midpoint. A and B are standalone, D's bull adds synergies, C includes Range.
Three seats sit below the band. C clears it because its base case adds Range and synergies; 73% of its figure is about $2.79B, below the band, on our rough cut. C still would not buy on its own number: "paying for convexity into an event stack while credit spreads widen is how asymmetric trades become symmetric ones."
What each seat would pay.
| Investor | Entry discipline |
|---|---|
| A | An 8% yield on five-year average per-share free cash flow, about 12x, with net debt under 1.5x operating cash flow |
| B | 7x verified normalised earnings or less |
| C | A 14% trailing free cash flow yield standalone, or a deal spread above about 8% after a second request |
| D | A 14% normalised yield on the combined company, or under 4.5x EBITDA, after closing and a buyback |
Comparables
| Company | Market cap | Growth last FY | Operating margin | P/E | FCF yield |
|---|---|---|---|---|---|
| EQT (EQT) | $34.8B | 63.9% | 37.6% | 12.8x | 10.8% |
| Expand Energy (EXE) | $21.6B | 186.3% | 20.4% | 7.8x | 12.4% |
| Antero (AR) | $12.3B | 19.6% | 17.2% | 11.0x | n/a |
| CNX (CNX) | $5.4B | 76.8% | n/a | 5.7x | 9.7% |
| Range (RRC) | $10.6B | 27.3% | n/a | 12.4x | n/a |
SEC filings and the Yahoo Finance price, computed the same way for each row. n/a: inputs did not match one period.
Enterprise value to after-tax operating income: EQT 12.8x, Expand Energy 8.5x, Antero 12.9x. Net debt to operating income: EQT 1.4x, Expand 0.8x.
Growth here is mostly price and deals. EQT has the widest margin, which is the pipe, and a higher multiple and lower cash yield than Expand, its nearest peer in size. Some of the integration story is already paid for.
Key risks
Ranked by the desk; Raised by lists every source.
| Risk | Why it matters | Raised by | First signal |
|---|---|---|---|
| High. Gas stays cheap | Upstream carried 74% of first-half segment operating income | 10-K Item 1A; Analyst; Investors A, C, D | Upstream margin below 10% by November 9, 2026 |
| High. Per-share dilution | Range adds roughly 37% to the existing share count | Analyst; Investors A, B, D | 2026 per-share free cash flow below 2025 |
| High. One basin | Takeaway limits hit every asset at once | 10-K Item 1A; Analyst; Investor B | Ongoing: permit challenges to new takeaway |
| Medium. The deal breaks | Past FTC scrutiny reported by Morningstar, not confirmed in a filing | 8-K; Investors C, D | An 8-K disclosing a second request |
| Medium. Credit tightens | Notes terms unknown; high-yield spread up 72bp in 30 days | Analyst; Investor C | High-yield spread at 5.00% for a month |
The value forum we check for bear cases has no EQT thread. Near-term solvency is settled by the filings: net debt of $5.54B against 2025 operating cash flow of $5.13B.
What to watch
| Date | Event | What it decides |
|---|---|---|
| October 27, 2026 | Third-quarter results (Exhibit 99.1, October 26, 2026) | Whether June was hedge noise |
| November 9, 2026 | 10-Q deadline under SEC rules | Upstream against 10%, pipe against 50% |
| Ongoing | S-4 and HSR review (8-K, October 26, 2026) | Whether a second request comes |
| First quarter of 2027 | Expected closing (Exhibit 99.1) | The share count every per-share test uses |
| March 1, 2027 | 2026 10-K deadline under SEC rules | Per-share free cash flow against 2025 |
Owning it onchain
xStocks issues EQTx, a token tracking EQT. We have not judged whether it is investable: our only quote came before regular US trading opened on October 26, 2026, when market makers quote thinly. Backpack's EQT.US is not investable: it is not verified on Jupiter.
xStocks says its tokens are not offered in the United States or to US persons. Sunrise blocks users in the United States and Canada from Backpack's tokens.
This is not a recommendation.
Data
| Item | Figure | Source |
|---|---|---|
| Price | $55.63 | Yahoo Finance close, October 23, 2026 |
| Shares outstanding | 625,516,000 | SEC EDGAR cover data, July 14, 2026 |
| Market cap | $34.80B | Price times shares |
Method. Four investors with different philosophies, each on a different AI model, read one identical fact sheet and voted independently. A name needs three Buys to enter a basket. How the committee works.
Correction. This article first called EQTx investable on a 1.46% round-trip cost. That quote was taken before regular US trading opened, when market makers quote thinly. We now judge that cost only during regular US market hours, and we have removed the figure, the verdict and the mint.
As of October 26, 2026, BagsCapital manages no outside capital and holds no position in EQT Corporation. Nothing here is investment advice.