EQT in 3Q17: Improved Price and Production Outlook?

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Part 3
EQT in 3Q17: Improved Price and Production Outlook? PART 3 OF 6

What’s Been Driving EQT Stock?

EQT Corporation’s stock performance

Since the beginning of this year, EQT Corporation (EQT) has fallen ~2.1%. The energy sector, reflected in the Energy Select Sector SPDR ETF (XLE), has fallen ~10% since the beginning of 2017.

What&#8217;s Been Driving EQT Stock?

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EQT’s stock movements have been mirroring movements in crude oil prices (DBO) and natural gas prices (UNG), as you can see in the image above. However, on a year-to-date basis, EQT’s returns have been higher since January 2017, compared to crude oil prices and natural gas prices.

However, EQT has underperformed the broader market ETF, reflected in the S&P 500 ETF (SPY)(SPX-INDEX), which has given a return of 13% since the beginning of this year.

What has been driving EQT’s stock recently?

In the graph above, we see that EQT stock has recently seen a massive spike following its announcement in June that it plans to acquire Rice Energy (RICE) for approximately $6.7 billion. We saw more interest for the stock in July after Jana Partners revealed a 5.8% stake in EQT and opposed EQT’s intention to acquire Rice, declaring its intention to influence the company’s strategy.

D.E. Shaw also recently joined Jana Partners in urging EQT to split its business into separate upstream and midstream businesses.

EQT acknowledged criticism that the separate entities could turn out to be worth more if the businesses were, in fact, separated. The company announced that it was developing a plan to address this issue by the end of 2018. We’ll discuss this outlook in the next part of this series.

The EQT-Rice deal is by far the largest acquisition this year in terms of dollar value. To learn more about mergers and acquisitions, see These Have Been the Top 5 Energy M&A Deals So Far This Year.


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