EQT Corporation (NYSE:EQT) acquired Tug Hill and related midstream assets at a $5.2 billion value implying a 2.7x multiple on 2023 EBITDA (strip), which, according to RBC Capital analysts, is an attractive value and enhances the shareholder proposition.

The acquisition enhances free cash flow generation that amounts to a total of $6 billion (2023) at strip commodity prices. According to the analysts, the company’s comments at its Q2/22 conference call highlighted that acquisitions need to be more compelling than share buybacks and also additive to asset quality.

The analysts raised their price target to $57 from $55 to account for the stronger free cash flow profile and per share accretion.