Despite all the talk about shifting toward ‘green’ or renewable sources, natural gas remains a valuable resource. The US, for example, is both a major consumer and a major producer of the cleanest-burning of the fossil fuels.
In theory, the US can meet all of its gas needs from domestic production; in practice, due to limitations of infrastructure and transport, the country meets its needs through a combination of domestic production and imports, while simultaneously exporting gas for the world markets.
The US gas economy is based on two major production regions, the Marcellus Shale of the Appalachian Mountains in Pennsylvania, Ohio, and West Virginia, and the various hydrocarbon-bearing formations across Texas, Louisiana, and New Mexico. These states produce more than 75% of all US natural gas.
This robust foundation – and the relative insulation from oil price volatility – forms the basis for UBS’s positive stance on the U.S. gas sector. The investment bank sees natural gas as a reliable avenue for returns, especially as low oil prices continue to strain crude markets and trigger capex cuts among oil producers.
UBS analyst Joseph Parkhill underscored this point in a research note following a recent OPEC+ update: “We refresh our sector views and $50-80/bbl scenario runs from last month. We saw the faster supply increase as bearish for crude oil price, with the potential to send WTI <$55. Conversely, we see this as positive for natural gas, with the expectations for further oil focused capex cuts leading to reduced associated supply. This supports our Nat Gas E&P > Oil E&P preference…”
With that in mind, we’ve turned to the TipRanks database to take a closer look at two natural gas stocks UBS is recommending. Here’s what the bank has to say – and why these names may be worth a look.
EQT Corporation(EQT)
The first stock we’re looking at, EQT, is one of North America’s major natural gas companies, with operations in the production and midstream segments of the industry. EQT has extensive holdings in the Appalachian region of the US, tapping into the gas-rich Marcellus Shale formation. Specifically, the company has ownership or lease rights on more than 1,000,000 net acres in Pennsylvania and 600,000 net acres in West Virginia. In Ohio, EQT owns or leases another 150,000 net acres in the eastern part of the state, and is actively working to develop the Utica Shale production region.
EQT’s operations include horizontal drilling and hydraulic fracturing, technologies that have in recent decades opened up large gas reserves in the eastern US. While this has pushed prices for natural gas down, the increased supply and cleaner-burning nature of the fuel have both powered a larger increase in demand. The company also has extensive midstream operations, building and maintaining infrastructure resources that move natural gas and natural gas products from the wellheads to the storage facilities, refineries, and transport terminals.
EQT has been busy on the acquisition front. Last July, the company completed its acquisition of the midstream company Equitrans, a move that brought significant midstream assets into EQT’s portfolio. In addition, just last month EQT announced it had entered into an agreement with Olympus Energy, for an accretive bolt-on acquisition of Olympus’s upstream and midstream assets. The transaction, which is valued at $1.8 billion, is expected to close during 3Q25. EQT will pay approximately $500 million in cash and $1.3 billion in stock for the assets.
Turning to the recent financial results, EQT reported better-than-expected top and bottom-line figures for 1Q25. The company’s revenue, at $2.15 billion, was up 25% year-over-year and $60 million ahead of the forecast; the EPS of $1.18 was up 36 cents per share year-over-year and came in 17 cents per share better than had been anticipated. EQT generated $1.15 billion in free cash flow in Q1, compared to $399 million in the prior-year period.
For UBS analyst Josh Silverstein, the key points here involve EQT’s ability to maintain performance and production, his bullish thesis “driven by EQT’s visibly improved operational performance post the ETRN acquisition and our continued positive 2026+ natural gas outlook.”
“EQT’s positive skew to rising natural gas prices, ramping 2026 shareholder returns to 57% of FCF, and potential M&A and power supply contracting catalysts are additional drivers,” Silverstein went on to add. “We see 3+ % upside potential to EQT’s FCF and production outlook from each of these catalysts, which we believe are not reflected in the stock price. We also see the stock implying $3.75 HH vs. the FY26 $4.25 strip.”
Silverstein rates EQT shares a Buy, and backs it up with a $64 price target. That figure implies the stock will gain 13.5% over the one-year timeframe. (To watch Silverstein’s track record, click here)
There are 19 recent analyst reviews on record for this stock, and their 14-to-5 split favoring Buy over Hold gives EQT a Moderate Buy consensus rating. The shares are currently priced at $56.36 and have an average price target of $59, suggesting a one-year upside potential of a modest 5%. (See EQT stock forecast)
Gulfport Energy(GPOR)
Next on our list of UBS gas picks is Gulfport Energy, an independent exploration and production company working in the North American natural gas sector. Gulfport is based in Oklahoma and has operations in both its home state and in Ohio. The Oklahoma gas operations, totaling some 73,000 net reservoir acres, are located in the SCOOP play of the Anadarko Basin, a region known as the home of some of Oklahoma’s top hydrocarbon production plays. Gulfport’s SCOOP holdings generated some 212 MMcfe per day during 2024, making up about 20% of the company’s total natural gas production.
The company’s larger and more productive holdings are in Ohio, where Gulfport has acreage that gives access to both the Marcellus and Utica shale formations. These extensive geological formations, deep underground, stretch across the Ohio–West Virginia–Pennsylvania region and contain large reserves of natural gas. Gulfport’s Ohio holdings include approximately 208,000 net reservoir acres that tap into the Utica shale, and another 20,500 acres over the Marcellus. Together, these holdings produced 80% of Gulfport’s output last year, or approximately 842 MMcfe per day.
Gulfport released its 1Q25 results earlier this month during which it posted a net loss of $0.5 million for the first quarter, while it delivered adjusted EBITDA of $218.3 million. The company generated $177.3 million in net cash from operating activities and $36.6 million in adjusted free cash flow.
UBS analyst Peyton Dorne thinks there are several reasons why investors should take notice here. He writes, “GPOR forecasts returning nearly all FY25 Adj. FCF, ex. acquisitions to shareholders, or ~52% of CF, vs. peers’ ~23%. 2H25’s ramping buybacks are a catalyst, with potential upside from efficiency gains. GPOR’s ~15% 2025 RoC Yield tops peers’ ~7% from this strong returns framework… GPOR’s new mgmt. has sharply reduced well costs, with a 35% decline guided for FY25 Utica well costs vs. 2022. These savings improve capital efficiency and GPOR’s ~48% FY25 reinvestment rate is near the peer group’s top. We see potential upside to capital efficiency in 2026 as hedging declines and more cost savings accrue.”
Dorne rates GPOR stock a Buy and gives it a $215 price target that points toward a 9% gain in the next 12 months. (To watch Dorne’s track record, click here)
This is natural gas producer gets a Strong Buy consensus rating from the Street, based on 8 recent reviews that include 6 Buys and 2 Holds. The shares are trading for $196.85, and their $214.57 average target price closely matches Dorne’s objective. (See GPOR stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
