Oil demand rose significantly in the first half of 2021 thanks to a fast-paced economic reopening. Rising demand and production cuts drove oil prices to their near two-and-a-half-year highs…
However, the rapid spread of the COVID-19 Delta variant is now threatening to cool oil demand. As several countries reinstate travel restrictions to curb the spread of the virus, oil demand will likely remain low in the near term. Meanwhile, earlier this month, OPEC+ closed a deal to increase oil supply gradually, aiming to fully phase out production cuts by around September 2022. So, with depressed demand and a supply glut, oil prices are expected to decline further in the coming months.
Given this backdrop, we believe fundamentally weak energy stocks EQT Corporation (EQT – Get Rating), Tellurian Inc. (TELL – Get Rating), and Delek US Holdings, Inc. (DK – Get Rating) are best avoided now.
EQT operates as a natural gas production company in the United States. The Pittsburgh, Pa.-based company produces natural gas, natural gas liquids (NGLs), and crude oil.
On June 29, Halper Sadeh LLP, a global investor rights law firm, announced that it was investigating EQT concerning alleged violations of the federal securities laws and/or breaches of fiduciary duties relating to its merger with Alta Resources Development, LLC. Other law firms are also investigating the issue.
EQT’s total operating revenues came in at a negative $260.12 million, indicating a decline of 149.4% year-over-year in its fiscal second quarter, ended June 30. Its operating loss grew 214.7% from its year-ago value to $1.22 billion, while its net loss increased 256% year-over-year to $936.46 million over the period. The company’s loss per share increased 225.3% year-over-year to $3.35.
A $1.09 billion consensus revenue estimate for its fiscal third quarter, ending September 2021 indicates a 27.2% improvement from the same period last year. However, its EPS is expected to remain negative in the current quarter.
Over the past month, EQT share price has declined 10.8% to close yesterday’s trading session at $19.17.
EQT has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
EQT has a D grade for Value, Stability, and Quality. Among the 91 stocks in the Energy – Oil & Gas industry, EQT is ranked #82.
Beyond what we’ve stated above, we have also rated EQT for Growth, Sentiment, and Momentum. Click here to view all EQT ratings.
Houston, Tex.-based TELL is an oil and gas exploration and production company that focuses on developing liquefied natural gas (LNG) projects along the United States Gulf Coast. The company is developing a portfolio of natural gas production, liquefied natural gas (LNG) marketing, and infrastructure assets.
On August 6, TELL announced the closing of a public offering of 35,000,000 shares of common stock at $3.00 per share. The offering should lead to a dilution of its share capital and thus decrease in EPS value.
TELL incurred a $30.60 million net loss, indicating a…
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