APA Corporation (APA) is a prominent global oil and gas player with a market cap of $10.61 billion. Founded in 1954, APA is headquartered in Houston, Texas, and engages in the exploration, development, and production of oil and natural gas resources. The company is known for its extensive portfolio of assets in the U.S. and internationally, with a strong presence in regions such as the Permian Basin and the North Sea.
Shares of the company have significantly underperformed the broader market over the past year. The stock has declined 34.6% over time, while the broader S&P 500 Index ($SPX) has rallied nearly 18.5%. In 2024 alone, the stock has declined 23.7%, compared to SPX's 12.1% gains on a YTD basis.
Narrowing the focus, APA’s underperformance looks less pronounced in comparison to the iShares U.S. Oil & Gas Exploration & Production ETF (IEO). The exchange-traded fund has declined 1.3% on a YTD basis compared to APA’s double-digit loss.
APA reported its Q2 earnings release on Jul. 31. EPS of $1.17 per share improved from $0.85 in the year-ago quarter. It exceeded its U.S. oil production guidance for the quarter and increased its full-year guidance. The stock gained marginally on the earnings release day but declined the following two consecutive trading sessions. APA rose more than 4% on Jul. 15 due to speculation that a Trump win in the upcoming presidential election would lead to reduced regulation in U.S. oil drilling.
For the current fiscal year, ending in December 2024, analysts expect APA to report an EPS decline of 8.8% year over year to $4.13 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing the forecast on two other occasions.
Among the 25 analysts covering APA stock, the consensus rating is to “Hold.” That’s based on eight “Strong Buy” ratings, 13 “Holds,” two “Moderate Sells,” and two “Strong Sells.”
On Aug. 1, Evercore ISI analyst Stephen Richardson maintained a “Hold” rating on APA with a price target of $39, which indicates a 44.4% upside from the current levels.
The mean price target of $38.54 represents a 42.7% premium to APA’s current price levels. The Street-high price target of $57 suggests an ambitious upside potential of 111.1%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
