EQT (EQT) is expected to report a strong operational quarter, with cash flow per share and production likely exceeding Street estimates, UBS said in an earnings preview Friday.

UBS forecast Q1 CFPS of $2.24 per share, above the Street consensus of $2.18 per share. The firm also models Q1 production at 566 billion cubic feet equivalent, above the Street's estimate of 562 Bcfe and ahead of the midpoint of EQT's guidance range of 525 Bcfe to 575 Bcfe.

UBS expects Q1 capital expenditures to total $615 million, including $523 million for maintenance and $93 million for strategic growth, with about $30 million allocated to Equitrans (ETRN) compression investments.

"We look for another strong operational quarter from EQT, consistent with the post-[Equitrans] acquisition trend of production beats," UBS said.

On the financial side, UBS expects EQT to remain focused on debt reduction, with free cash flow directed toward lowering the company's debt balance to $7.5 billion or less by year-end 2025.

For Q1 alone, UBS models $770 million in debt reduction, with a total of $2.1 billion in debt reduction for full-year 2025. The firm sees EQT maintaining its $2 billion debt reduction target in 2025 before ramping up share buybacks in 2026.

The firm reiterated its neutral rating on the stock with a price target of $58.

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