Expand Energy (EXE) is expected to generate nearly $1.1 billion in free cash flow in Q1, driven by higher natural gas prices, with production just below the midpoint guidance, RBC Capital Markets said in a Monday note.

The brokerage said Q1 earnings per share and cash flow per share estimates rose to $3.53 and $7.55, below the $3.89 and $8.21 consensus.

The firm said Q1 production is estimated at 7.43 billion cubic feet equivalent per day, below the 7.45 Bcfe/d consensus and the 7.4 to 7.5 Bcfe/d guidance midpoint. About $420 million cash-settled hedge loss, mostly from February, partially offset FCF, RBC noted.

Q1 guidance included winter weather impacts and additional third-party midstream downtime in the Haynesville. While resolved, these factors place RBC's forecast just below the guidance midpoint.

Investors are also focused on C-suite changes, mergers and acquisitions, liquidity exposure, progress on commercial agreements, capital return framework and Western Haynesville acreage potential.

Expand Energy plans to allocate at least $1 billion of free cash flow to debt reduction in 2026 and intends to make about $100 million of quarterly buybacks, with potential flexibility if market conditions weaken.

RBC has an outperform rating on Expand Energy with a $138 price target.

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