UtilityOctober 13, 2026

Utility Tuesday: Natural Gas at 3× EBITDA While the Market Prices in Perfection

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This Week's Setup

Natural gas independents at 3–6× EV/EBITDA and double-digit free cash flow yields sit 22–28 points below their 52-week highs while integrated majors at 7–11× EBITDA trade within 3% of all-time peaks.

Fear & Greed at 45 signals neutral positioning, but the S&P 500 CAPE at 38.9 still prices in near-perfect execution across the market. The 10-year Treasury yield is unavailable this week, but the earnings yield spread on natural gas names versus integrated majors tells the real story: CNX and EQT yield 22% and 10% on earnings, respectively, while the majors yield 3–7%.

Refiners remain the outlier: Valero trades 40% above analyst consensus at 9× EBITDA despite negative free cash flow in prior screens and a price target that implies a 41% markdown from here.

Quick Scan

#	Ticker	One-line thesis
1	CNX	11% FCF yield at 3× EBITDA, 22% drawdown
2	EOG	2% off highs with 15% ROIC, 28× coverage
3	EQT	9% FCF yield, 60% revenue growth, 32% upside
4	COP	13% ROIC near highs, 11× interest coverage
5	VLO	41% above target, 4% FCF yield, pricing tension
6	MPLX	8% yield, 19% ROIC, 7% below highs
7	BKR	20% drawdown, 27% upside, 14× interest coverage
8	CVX	1% off highs, 3% yield, 17× coverage

The 8 Names

1. CNX Resources Corporation (CNX)

EV/EBITDA: 3.33 | Interest coverage: 5.71x | 52w drawdown: -21.9%

CNX trades at 3.3× EV/EBITDA and yields 11% on free cash flow, the highest FCF yield in this week's screen. Revenue grew 49% year-over-year, and the stock sits 22% below its 52-week high while earnings yield 22%. The normalized 10-year P/E at 17% earnings yield suggests the setup here is pricing in a permanent decline in natural gas fundamentals rather than a cycle.

Interest coverage at 5.7× is the lowest among the independents and majors this week. Net debt sits at 1.2× EBITDA, manageable but heavier than EOG's 0.4× or ConocoPhillips' 0.7×. The 4.5× trailing P/E reflects either a structural discount or a market that expects this quarter's $0.57 EPS estimate to compress.

Director Maureen Lally-Green filed a Form 4 transaction on September 28. Short interest at 10% of float is the highest in this week's screen, signaling active skepticism despite the valuation compression. Earnings on October 29 will clarify whether the 49% revenue surge is sustainable into Q4.

2. EOG Resources, Inc. (EOG)

EV/EBITDA: 6.14 | Interest coverage: 28.07x | 52w drawdown: -2.5%

EOG sits 2.5% below its 52-week high with 15% ROIC and 28× interest coverage, the strongest balance sheet among the majors. Net debt at 0.4× EBITDA and 63% gross margins give the company room to maintain its 2.7% dividend yield even if natural gas prices compress further. The 10-year normalized earnings yield at 1.5% lags the group, but the current 6.8% earnings yield reflects operating leverage that most integrated peers lack.

Revenue declined 3.4% year-over-year, the only negative growth figure in the top four tickers this week. UBS raised its price target to $186 from $183, but the $160 consensus target implies just 7% upside from here. The stock is priced for stability, not discovery.

Michael Donaldson, Ezra Yacob, and Jeffrey Leitzell all filed insider sales on September 29. Short interest at 3.4% of float is low, but the insider activity flags no incremental conviction at these levels. November 5 earnings will test whether the integrated model can offset the revenue drag visible in the trailing twelve months.

3. EQT Corporation (EQT)

EV/EBITDA: 5.73 | Interest coverage: 7.79x | 52w drawdown: -22.0%

EQT yields 8.5% on free cash flow and trades at 5.7× EV/EBITDA with 60% year-over-year revenue growth, the fastest top-line expansion in this week's screen. The 10-year normalized earnings yield at 4.7% and the current 10× trailing P/E create a 32% upside to the $70 analyst target. The stock sits 22% below its 52-week high, a drawdown zone that historically preceded the strongest forward returns for gas independents.

Net debt at 0.7× EBITDA is higher than EOG's 0.4× and interest coverage at 7.8× trails the majors by a factor of two to four. ROIC at 9.2% is the lowest in the top four tickers, signaling capital intensity that may not translate to shareholder returns if gas prices flatten.

Director Daniel Rice IV and John McCartney both filed Form 4 transactions on October 5. The 1.2% dividend yield is the lowest among the top six names, suggesting EQT is prioritizing balance-sheet repair over immediate income. October 27 earnings will clarify whether the 60% revenue surge is sustainable or a comp-driven anomaly.

4. ConocoPhillips (COP)

EV/EBITDA: 6.76 | Interest coverage: 11.26x | 52w drawdown: -3.3%

ConocoPhillips trades at 6.8× EV/EBITDA and 13% ROIC, the second-strongest return on capital in the majors after EOG. The company sits 3.3% below its 52-week high with 11× interest coverage and net debt at 0.7× EBITDA, a balance sheet that supports its 2.5% dividend yield without stress. The $143 analyst target implies 4% upside, but the stock's proximity to all-time highs reflects a market that trusts the integrated model more than the independents.

The 10-year normalized earnings yield is negative 0.9%, signaling that current earnings are running well above the decade average. Revenue grew 8% year-over-year, the slowest pace in the top four names. Gross margin at 25% trails EOG's 63% and CNX's 47%, a structural cost issue that limits upside if commodity prices roll over.

Silvina Vatnick, Sylvia Escovar Gomez, and Juan Esteban Toro Valencia all filed insider transactions between September 23 and 24. Short interest at 2.3% of float is low, but the insider activity does not signal incremental buying conviction. November 5 earnings land the same day as EOG's, creating a paired test for the integrated major thesis.

5. Valero Energy Corporation (VLO)

EV/EBITDA: 9.11 | Interest coverage: 6.40x | 52w drawdown: -3.0%

Valero trades at $436, 40% above the $259 analyst target, the widest gap in this week's screen. The stock yields 1.1% on dividends and 3.9% on free cash flow, but the 32× trailing P/E and 9× EV/EBITDA multiple sit at odds with negative 5.5% revenue growth and a 4.4% gross margin. The 10-year normalized earnings yield is negative 2.1%, signaling current earnings are at least double the decade average.

Citigroup raised its price target to $485 from $302, but the move reflects upward revisions to near-term refining margins, not a structural improvement in the business. If margins compress, the 41% premium to analyst consensus becomes a 41% markdown risk. Interest coverage at 6.4× is the lowest among the majors, and net debt at 0.6× EBITDA leaves less cushion than EOG or ConocoPhillips.

Gary Simmons, Robert Reymond, and Matthew Audette all filed insider transactions between September 18 and 21. October 22 earnings will test whether the refining margin thesis can justify a valuation that prices in perfection.

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6. MPLX LP (MPLX)

EV/EBITDA: 13.45 | Interest coverage: 5.82x | 52w drawdown: -6.5%

MPLX yields 7.6% on dividends and 7.1% on free cash flow, the highest income yield in this week's screen. ROIC at 19% is the strongest return on capital among all eight names, and the 44% gross margin reflects the toll-road economics of midstream infrastructure. The stock sits 6.5% below its 52-week high with a $61 analyst target implying 7% upside.

EV/EBITDA at 13.5× is the highest multiple in the screen, reflecting the defensive nature of the business but limiting valuation expansion from here. Net debt at 4.1× EBITDA is also the highest leverage ratio, a structural constraint for a partnership that relies on distribution coverage to maintain its yield. Revenue grew 5% year-over-year, the slowest pace among the top six tickers.

Interest coverage at 5.8× is the second-lowest in the screen after Valero. If natural gas production growth slows, the throughput economics that support the 19% ROIC could compress. November 3 earnings will clarify whether the 7.6% yield is sustainable or at risk of a cut.

7. Baker Hughes Company (BKR)

EV/EBITDA: 13.04 | Interest coverage: 13.96x | 52w drawdown: -20.0%

Baker Hughes sits 20% below its 52-week high with 13× EBITDA coverage and 14× interest coverage, the second-strongest balance sheet among the service names. The $72 analyst target implies 27% upside, and the 4.5% free cash flow yield sits in the middle of the screen. ROIC at 13% and 24% gross margins reflect a capital-light model relative to the integrated majors.

Revenue declined 0.3% year-over-year, and the 10-year normalized earnings yield at 0.3% signals current earnings are near the top of the cycle. The 18× trailing P/E is the highest among the service names, and the 1.6% dividend yield is the lowest income return in the bottom four tickers. Short interest at 2.3% of float is unremarkable.

BKR announced an expansion of its Le Creusot site to double ICL production capacity, a capital commitment that should support earnings visibility into 2027. October 27 earnings land the same day as EQT and Baker Hughes, creating a paired test for the service thesis versus the producer thesis.

8. Chevron Corporation (CVX)

EV/EBITDA: 10.90 | Interest coverage: 17.22x | 52w drawdown: -1.1%

Chevron trades 1.1% below its 52-week high with 17× interest coverage and a 3.3% dividend yield, the highest income return among the majors. The $216 analyst target implies 0.3% upside, signaling the stock is fully priced at consensus. Net debt at 1.1× EBITDA is the highest among the majors, but the 17× interest coverage provides ample cushion.

The 38× trailing P/E and 11× EV/EBITDA multiple sit at odds with negative 4.6% revenue growth and a 10-year normalized earnings yield of negative 2.6%. ROIC at 7.3% is the lowest in the screen, and gross margin at 30% trails EOG by 33 percentage points. The stock is priced for stability, not growth.

Insider selling totaled 824,000 shares over the past six months with zero offsetting buys. October 30 earnings will test whether the 3.3% yield is sustainable if oil prices flatten or decline into year-end. Short interest at 1.1% of float is the lowest in the screen, reflecting institutional consensus that the integrated model is the safest place to hide in energy.

What to Watch

October 22: Valero earnings test whether refining margins can justify a 40% premium to analyst consensus; if the EPS estimate of $20.41 disappoints, the 32× P/E unwinds fast.
October 27: EQT and Baker Hughes report the same day; the paired results will clarify whether the 60% revenue growth at EQT is sustainable and whether BKR's ICL capacity expansion translates to earnings visibility.
October 29: CNX earnings test whether the 49% revenue surge and 11% FCF yield are cycle or structure; short interest at 10% of float means a beat could compress the short position quickly.
November 3–5: MPLX, EOG, and ConocoPhillips report within three days; the cluster will determine whether the integrated major thesis holds or whether the independents at 3–6× EBITDA offer better risk-adjusted returns into 2027.

Go Deeper

The utility screener finds cash-generative energy infrastructure and commodity producers trading below replacement cost with strong interest coverage.
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