Goldman Sachs Sees Strong 'Secular Demand' For Natural Gas, Raises Estimates On Two Industry Players

Surging liquefied natural gas exports and a structurally strong demand outlook are setting the stage for higher natural gas prices, according to Goldman Sachs.

In a note shared Wednesday, analyst Neil Mehta delivered a bullish outlook for Antero Resources Corp. AR and National Fuel Gas Co. NFG ahead of their fourth-quarter earnings.

“We view the secular demand outlook for natural gas as strong, with significant catalysts ahead in LNG export capacity ramping in 2025,” Mehta said.

Natural gas prices — as tracked by the U.S. Natural Gas Fund LP UNG — have already staged an impressive rally, with Henry Hub futures more than doubling in the past six months to near $4 per million British thermal units.

Yet, Goldman sees more room to run, particularly for companies with exposure to key export hubs.

Antero: Positioned For A Natural Gas Price Boom

Goldman Sachs reaffirmed its ‘Buy’ rating on Antero Resources, raising its 12-month price target from $39 to $44 as the company stands to gain from increasing LNG exports.

“We believe AR is positively positioned to capture the inflection in natural gas prices given its unhedged position and exposure to Plaquemines," Metha said.

With direct access to Gulf Coast markets via the Tennessee Gas Pipeline 500L, Antero is set to benefit as U.S. LNG export capacity ramps up in 2025.

Goldman Sachs now expects Antero to generate free cash flow at an 8.5% yield in 2026, down from a previous 9.5% estimate, reflecting higher valuation confidence.

The bank also raised its 2024-2026 EBITDA forecasts to $872 million, $1.52 billion, and $2.31 billion, adjusting for commodity price movements.

Still, risks remain. A drop in natural gas and NGL prices, unexpected cost pressures, or regulatory hurdles could weigh on Antero's outlook.

National Fuel Gas: A More Defensive Play

Goldman Sachs maintained a ‘Neutral’ rating on National Fuel Gas, though it raised its 12-month price target to $76 per share from $71. The bank also lowered its 2026 free cash flow yield estimate to 6.5% from 7%, reflecting improved confidence in natural gas demand and its impact on the company's non-regulated earnings.

"We expect shares to remain more defensive relative to our upstream natural gas coverage," Mehta said, noting that National Fuel Gas trades at a 7% free cash flow yield for 2026, below the 9% peer average.

Goldman Sachs increased its 2024-2026 EBITDA estimates to $1.19 billion, $1.37 billion, and $1.61 billion, slightly adjusting its prior forecasts based on updated commodity pricing and regulatory developments.

The bank is watching the company’s New York Utility rate case, its 2025 capital spending plans, and a potential expansion of share repurchases.

Market Reactions

Data released by the U.S. Energy Information Administration on Thursday showed that U.S. natural gas storage levels fell by 223 billion cubic feet in the week ending January 17, 2025, following a 258 bcf draw the previous week and missing expectations for a 244 bcf decline.

Henry Hub natural gas prices were up 1.6% to $4.01/MMBtu on Thursday, following a 5.4% surge the previous session.

Shares of Antero Resources rose 0.7% by 10:30 a.m. ET, on track for the highest session close since mid-September 2022. Shares of National Fuel Gas Co. also edged up by 0.7%, eyeing their tenth positive session in the last eleven.

Now Read: