RBC Capital analysts provided their views on Southwestern Energy Company (NYSE:SWN) ahead of the upcoming Q2 earnings release, expecting strong operational performance, biasing production up from the midpoint.

According to the analysts, the key investor debates are how active the company gets with stock buybacks given leverage reduction is also a priority, incremental shareholder return plans, appetite for large acquisitions specifically in the Haynesville, and the near-term hedge book overhang.

The analysts expect Q2 EPS/CFPS to be $0.27/$0.60, which is below the Street estimates of $0.35/$0.62.

However, the analysts noted that other consensus models are not appropriately accounting for the company’s hedges, where they estimate a $1.6 billion loss (84% of oil and 93% of natural gas production hedged in Q2).