Here Is Why the Hold Strategy Is Apt for EQT Stock Right Now

EQT Corporation EQT, one of the largest U.S.-based producer of natural gas, has witnessed an impressive rise of 23.1% in its share price over the past year, outperforming the broader Oils-Energy sector's 7.5% growth during the same time frame. EQT has clearly outpaced its sub-industry peers, including Antero Resources Corporation AR and Range Resources Corporation RRC. Antero Resources reported a rise of 10.4%, while Range Resources stock rose 3.4% during the period. Image Source: Zacks Investment ResearchEQT is primarily involved in the production of natural gas, with numerous untapped drilling locations within the highly productive Appalachian Basin in the United States, presenting a robust production outlook. Let us look at the key factors influencing EQT’s recent gains and its performance.Positive Factors Boosting EQT’s PerformanceRising Demand for Natural Gas: EQT, being a pure-play natural gas producer, is set to benefit from the increasing demand for natural gas as a cleaner-burning fuel. Furthermore, the rapid development of gas-fired power plants and the rise in data centers in the Appalachian region, combined with ongoing coal plant retirements, are expected to drive demand for natural gas by 2030. EQT estimates that these trends could contribute to roughly 10 billion cubic feet per day (Bcf/d) of incremental gas demand by 2030. As a large-scale, vertically integrated natural gas producer in the Appalachian Basin, the company is well-positioned to support this increase in demand.Increase in Natural Gas Prices: Natural gas prices have shown a notable increase in 2025 compared to the prior year's levels. Furthermore, due to the winter heating season, natural gas prices are increasing, driven by the rising consumption for space heating.  As per the U.S. Energy Information Administration, Henry Hub spot natural gas prices are projected to average $4.30 per million British thermal units (MMBtu) during the winter heating season between November and March, representing an increase of 22% from last winter. Healthy natural gas prices are expected to support earnings growth and an increase in free cash flow generation for EQT.Strong Free Cash Flow Generation: EQT has consistently outperformed its free cash flow estimates over the past few quarters. In the third quarter, the company recorded strong free cash flows of $484 million, attributable to EQT.  The company has generated over $2.3 billion of cumulative free cash flow between the fourth quarter of 2024 and nine months of 2025 at an average natural gas price of just $3.25 per million Btu. The significant cash flow generation capabilities of the company underscore its strong operational and financial performance, which generates tangible returns for shareholders. The high free cash flow generation provides resilience against market volatility and supports long-term shareholder returns, while also enabling the company to pursue growth opportunities.Headwinds to Consider Hedging Strategy: EQT plans to keep a majority of its natural gas production for 2026 and beyond unhedged. This decision offers material upside if natural gas prices strengthen, resulting in higher price realizations. However, oil and natural gas prices remain highly volatile depending on a number of factors. Hedging allows producers to fix prices beforehand, thereby ensuring revenue stability in case of price downturns. Keeping a significant portion of its production unhedged increases EQT’s exposure to price declines, which may impact its cash flows in the case of significant volatility.Increasing Prominence of Renewables Poses Long-Term Risks: The growing prominence of renewables in the energy landscape, like solar and wind power for electricity generation as an alternative to traditional fossil fuels, poses risks for exploration and production players like EQT. The global shift toward renewable energy sources to improve the sustainability of the energy sector is gaining momentum. The broader energy transition may limit the use of traditional fossil fuels, thereby pressuring EQT’s volume growth in the long run.Concluding RemarksEQT benefits from the rising demand for natural gas driven by the rise in data centers and artificial intelligence, healthy natural gas prices, and strong free cash flow generation. However, its hedging strategy poses risks to its financial performance. Furthermore, the increasing shift toward renewables also raises concerns. Hence, it is recommended to exercise caution with this Zacks Rank #3 (Hold) stock.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Antero Resources Corporation, carrying a Zacks Rank #3, is one of the leading natural gas and natural gas liquids producers in the United States. The company boasts more than 20 years of premium, low-cost inventory in the Appalachian Basin, primarily in West Virginia and Ohio.Range Resources Corporation, carrying a Zacks Rank #3, is one of the top 10 natural gas producers in the United States, primarily operating in the prolific Appalachian Basin. RRC updated its total production for 2025 to approximately 2.23 billion cubic feet equivalent per day, with more than 30% attributed to liquids production. Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Range Resources Corporation (RRC): Free Stock Analysis Report EQT Corporation (EQT): Free Stock Analysis Report Antero Resources Corporation (AR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks