Scotiabank said it sees risks to the magnitude and timing of power demand from data centers.
- Scotiabank lowered EQT’s price target to $53 from $54 and maintained a ‘Sector Perform’ rating, according to The Fly.
- UBS expects the acquisition to be positive despite near-term dilution for EQT.
- Wells Fargo said near-term weakness in the U.S. gas market presents an attractive buying opportunity in EQT shares.
EQT Corp.’s (EQT) proposed acquisition of Range Resources (RRC) has drawn mixed reactions from Wall Street, with Scotiabank questioning why the deal is being considered amid weak U.S. natural gas prices and uncertainty about demand.
The firm lowered EQT’s price target to $53 from $54 and maintained a ‘Sector Perform’ rating, according to The Fly. This represents a 4.5% downside from current levels.
EQT shares were up 0.6% at the time of writing, having closed in the red on Monday.
Scotiabank Sees Risk In Power Demand
Scotiabank questioned why EQT is willing to pay for Range Resources’ assets at current commodity prices, given that much of the deal’s value depends on higher long-term natural regional gas demand.
The firm also said that it sees risks to the magnitude and timing of power demand from data centers.
U.S. natural gas prices have come under pressure lately from rising production and forecasts of warmer weather. The ProShares Ultra Bloomberg Natural Gas ETF (BOIL) fell 3.3% on Tuesday and is tracking its fifth straight monthly loss.
Natural gas futures for December 2026 deliveries were down about 1% at about $3 per million British thermal units (MMBtu) at the time of writing.
EQT To Own 73% Of Combined Firm
On Monday, EQT announced a deal to acquire Range Resources in an all-stock transaction, creating “America’s largest and only vertically integrated natural gas producer,” with a combined enterprise value exceeding $50 billion.
Existing EQT shareholders will own about 73% of the combined company, while Range Resources investors will hold the remaining 27%. EQT expects the merger to generate $325 million in annual savings within two years, potentially exceeding $600 million over the longer term. The company also projects about $20 billion in cumulative free cash flow over five years.
UBS Sees Long-Term Value In RRC Acquisition
UBS also lowered its price target on EQT to $75 from $76 and maintained a ‘Buy’ rating. The brokerage expects the acquisition to be positive despite near-term dilution. The firm expects the Range Resources acquisition to be 4% to 7% dilutive to full-year 2027 and 2028 earnings estimates, according to Investing.com.
However, UBS sees long-term value for EQT, including higher inventory quality and depth, reduced costs, and improved financial strength.
Wells Fargo Sees Buying Opportunity
Wells Fargo lowered EQT’s price target to $71 from $79 but maintained an ‘Overweight’ rating. The brokerage cited the price cut to near-term weakness in the U.S. gas market, including forecasts of an El Niño winter, which could raise temperatures and lower heating demand.
However, Wells Fargo believes near-term weakness in the gas market presents an attractive buying opportunity ahead of the merger’s expected completion in the first quarter of 2027.
Retail’s Take On EQT And RRC
Retail sentiment surrounding EQT on Stocktwits turned ‘bullish’ from ‘neutral’ over the past 24 hours, amid ‘high’ message volumes. Sentiment for RRC turned ‘neutral’ from ‘bullish.’
EQT shares have climbed about 3.6% so far in 2026, significantly underperforming RRC’s 54% gains.
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