Equitrans Midstream Corp ETRN

Equitrans Earnings: Mountain Valley Pipeline Now Costs $7.9 Billion, but Acquisition by EQT on Track

Equitrans’ first-quarter results were on the weaker side, as EQT is curtailing volumes on Equitrans’ system, and the Mountain Valley Pipeline updates were disappointing. However, EQT's acquisition of Equitrans remains on track to close in the second half of the year. The merger offer of 0.3504 EQT share per Equitrans share implies an Equitrans stock price of over $14 based on EQT’s current stock price. With Equitrans trading near $14 a share, this situation represents a good outcome for Equitrans shareholders who do not want to hold EQT shares. We now consider EQT— and by extension Equitrans—more overvalued based on our valuations for peers Range Resources and Antero Resources. We expect to maintain our $12 fair value estimate and narrow moat rating for Equitrans.