Yield

Yield

The framework prices this on adjusted free cash flow — reported FCF less stock-based compensation less a five-year average of acquisition spend — against a balance-sheet-selected reference line. EQT's FY2025 adjusted FCF works out to roughly $1.83 billion, a 5.6% yield on today's $32.8 billion market cap; the three-year average is 1.6%. Net debt near 1.3x EBITDA puts it on the 10% default line, so FY2025 sits about 440 basis points short, and the trailing average far more. The deterministic feature could not compute this — the workings below are rebuilt from the filed cash-flow statements.

The adjustment, line by line

The profile's fit_features.adjusted_fcf returned not_computable: the structured cash-flow feed carried no stock-based-compensation field for any year, so the derivation had no SBC to subtract. The components exist in the filed 10-Ks, so the table below reconstructs the adjustment directly from the consolidated statements of cash flows. Every reported-FCF and add-back figure is anchored to a filing page; the adjusted-FCF column is a computation, captioned as such.

Adjusted FCF = reported FCF − SBC − trailing five-fiscal-year average of cash paid for acquisitions; derived from company filings. Reported FCF and add-backs from the consolidated statements of cash flows: FY2025 10-K [1]; FY2022 10-K [2]; FY2021 10-K [3]. Adjusted-FCF column derived from fit_features inputs.

Two features stand out. SBC is small — $61 million in FY2025 against $2.84 billion of reported FCF [4] — so the SBC dock barely moves the number; the FY2024 spike to $158 million reflects merger-related vesting [5]. The acquisition dock does the work. Cash paid for acquisitions has been lumpy and large — $2.27 billion (FY2023, Tug Hill and XcL), $0.87 billion (FY2024), $0.48 billion (FY2025, Olympus) [6] — so the trailing five-year average holds near $0.94 billion a year. Subtracting it turns FY2024 adjusted FCF negative (roughly −$570 million) and cuts FY2025 from $2.84 billion reported to about $1.83 billion.

The Olympus consideration — 25,229,166 shares worth about $1,471 million plus roughly $473 million cash — is set out in the FY2025 10-K [7]. It is one instance of a pattern: shares outstanding rose from 167 million (FY2016) to 616 million (FY2025), a five-year share-count CAGR near 18.8% (fit_features.share_count_trend), as Alta, Tug Hill, Equitrans and Olympus were funded substantially in equity. A yield basis built on cash acquisitions therefore flatters a company that has bought growth largely with stock — a point the Durability and Self-Help tabs carry further.

The yield, three ways

Yields on the $32.8 billion market cap ($53.29 close, 31 Jul 2026; 615.7M shares, per fit_features.market_cap). Adjusted FCF derived from filings [8]; market cap from the data feed.

On the reported number the yield is 8.6%. Docking SBC and the acquisition average brings the current-year figure to 5.6% ($1,834M / $32,812M). The through-cycle picture is weaker: averaging the three computable adjusted years — FY2023 $300M, FY2024 −$570M, FY2025 $1,834M — gives about $521 million, a 1.6% yield. FY2025's 5.6% is an above-trend year, not a settled level.

On the profile's jump test (fit_features.yield_baseline, also not_computable for want of a historical adjusted-FCF series), the qualitative read runs the other way from the fortress signature. This is not a stable low-single-digit name that has suddenly repriced to 8–9%; reported FCF has swung from −$23 million (FY2018) to $2.84 billion (FY2025), and the current adjusted yield sits above its own three-year average, not far above a formerly steady baseline. The volatility is the baseline.

Which bar applies

The reference line is set by the balance-sheet class. fit_features.balance_sheet_class returned unknown because EBITDA was missing from the FY2025 feed, but both inputs are in the filings.

Net debt from fit_features ($7.69B = $7,293M long-term debt + $507M current maturities − $111M cash), anchored to the FY2025 balance sheet [9] and debt note [10]. EBITDA = operating income $3,250M + DD&A $2,600M, from the FY2025 statements of operations [11] and cash flows [12].

FY2025 EBITDA is operating income of $3.25 billion [13] plus DD&A of $2.60 billion [14], or $5.85 billion — close to the $5.9 billion figure the sell side reports. Against $7.69 billion of net debt that is 1.31x. Under the profile's rule (fortress at 0.5x or below, levered at 3.0x or above), 1.31x is the moderate band, which selects the 10% default line rather than the softer 8–9% fortress line.

Against that line the arithmetic is plain: 5.6% on FY2025 adjusted FCF is about 440 basis points short of the 10% bar; the 1.6% three-year average is about 840 basis points short. The name does not sit on the fortress line where an 8–9% yield would clear.

Normalized mid-cycle yield

EQT is a commodity cyclical, so a single year misleads and the normalization matters. FY2024 was a trough — Henry Hub averaged near multi-year lows and reported FCF fell to $573 million; FY2025 rebounded to $2.84 billion on firmer prices and the first full year of Equitrans midstream cost capture; FY2022's $2.07 billion rode the post-invasion gas spike. The swing is wide enough that the mid-cycle figure is a judgment, not a reading.

The workings, stated so they can be recomputed under other assumptions:

Trailing anchor. Three-year reported FCF (FY2023–FY2025) averages $1.52 billion — but two of those years predate the full Equitrans cost structure and the current LNG-driven demand pull.

Forward anchor. Consensus organic FCF (FY2026–FY2029) averages about $3.37 billion, on a higher post-integration production base (about 2.4–2.6 Tcfe) and lower midstream unit cost.

Mid-cycle assumption. Splitting toward the post-Equitrans structure — Henry Hub roughly $3.50–4.00/MMBtu, capex about $2.3–2.8 billion, no new large cash acquisition — puts mid-cycle reported FCF near $2.7 billion, an ~8.2% reported yield. Docking SBC (~$60M) and a normalizing acquisition average (~$0.5B as the 2021–2024 wave ages out) leaves mid-cycle adjusted FCF near $2.1 billion, about 6.5%.

So a fair mid-cycle adjusted yield lands around 6–7% — well above the depressed 1.6% trailing average, still 300–350 basis points inside the 10% line. A skeptic who assumes a $3.00 gas deck or continued cash M&A gets a lower number; one who trusts the full consensus plateau and no acquisition dock gets close to the bar. The sensitivity is mostly to the gas price and to whether the roll-up spending stops.

The consensus check

Consensus forward free cash flow (S&P Capital IQ, fit_features.consensus_forward_yield, vintage August 2026) is the reported-FCF proxy — the vendor does not publish an SBC-and-acquisition-adjusted series, so the chart shows consensus reported FCF and, alongside it, that same stream carried onto the framework's adjusted basis (less ~$60M SBC and the trailing acquisition average, which assumes no new cash M&A).

Reported-yield line from fit_features.consensus_forward_yield (S&P Capital IQ mean FCF ÷ current market cap): FY2026 9.5%, FY2027 9.6%, FY2028 11.7%, FY2029 10.3%. Adjusted-yield line derived by applying the framework's SBC and trailing-5-yr-acquisition docks to the same consensus FCF; the 10% line is the framework reference. Source: consensus data feed, as reported.

On the reported basis, consensus already clears the 10% line by FY2028 (11.7%) and holds it in FY2029 (10.3%) — the sell side sees the FCF the fear is discounting. On the framework's adjusted basis the crossing is later: FY2026 and FY2027 sit near 7.1–7.2%, and the yield reaches the bar only around FY2028 (about 10.7%), as the 2021–2024 acquisition wave rolls out of the trailing average.

That is the mean-reversion path, and its probability is conditional. The mechanism is real and largely mechanical — the acquisition dock shrinks each year unless refilled, and post-Equitrans volumes plus LNG demand lift organic FCF. The condition is that EQT stops making large cash acquisitions; it has not obviously stopped (Olympus closed July 2025, and it exercised the MVP buy-out right in January 2026 [15]). Weighing a supportive gas-demand setup against a live acquisition habit and gas-price risk, the adjusted yield clearing 10% and holding it within one to three years is more likely than not but not high-confidence — call it roughly 55–60%. What consensus would have to concede for the base case to hold is simply the FCF it already forecasts; what it does not model, and what would defer the crossing, is the next cash-funded deal.

FCF conversion trend

GAAP revenue is distorted by mark-to-market derivative gains and losses, so FCF-to-revenue is noisy here — on total operating revenues it runs 16.8% (FY2023, $6.91B), 10.9% (FY2024, $5.27B) and 32.8% (FY2025, $8.64B) [16]. The cleaner read is FCF as a share of operating cash flow, which strips the hedge noise.

FCF ÷ operating cash flow, from the consolidated statements of cash flows, FY2020–FY2025 [17] [18].

Conversion is not trending in a clean line — it tracks the capex cadence and gas price, dropping to 20% in the FY2024 investment trough and rebounding to 55% in FY2025. There is no steady deterioration that would undercut the forward case, but there is no compounding improvement either; the series is cyclical rather than directional, consistent with the volatility that keeps the through-cycle yield below the bar.