EQT's (EQT) Q3 results could be pressured by weak Appalachian natural gas prices and planned production cuts, but its longer-term cash flow outlook continues to improve, UBS Securities said in a report emailed Thursday.

The firm forecasts Q3 cash flow of $1.62 per share, below the $1.76 consensus estimate, and production of 590 billion cubic feet equivalent, compared with the consensus estimate of 611 billion. EQT expects to curtail 20 billion to 25 billion cubic feet of production during the quarter, "that was previously not factored," the report said.

UBS expects EQT to direct all free cash flow towards "balance sheet improvement," while the company "remains committed" to reach its $5 billion debt target, which is expected around year-end, according to the report.

EQT's midstream expansion, growing demand for power and liquefied natural gas sales agreements could support future cash flow, the firm noted. The company estimates the LNG agreements could add about $125 million in cash flow in 2028 at current market prices, according to the report.

UBS reiterated its buy rating on EQT, with a price target of $77.

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