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APA Corp APA

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Stock XNAS Rating as of
$29.26 +0.08 (0.27%)
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Company Report

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APA Earnings: Management Revises Synergies; We Still Believe Shares Are Undervalued

Stephen Ellis,

No-moat APA missed on FactSet consensus earnings per share by 19% while delivering on sales. It also came below the midpoint of guidance on production, but only narrowly. The earnings miss was driven by the write-off of two exploration locations in Alaska and one in Suriname. Despite these disappointing results, management remained an active repurchaser of shares, which, we believe, is a prudent action after the close of the stock-heavy Callon acquisition in April. Our new fair value is $54, down slightly from $55, driven mainly by the removal of one rig in acquired acreage and changes to our near-term commodity price forecast.

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Price vs Fair Value

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APA is trading at a 46% discount.
Price
$29.26
Fair Value
$88.00
Uncertainty
Very High
1-Star Price
$35.10
5-Star Price
$48.00
Economic Moat
Ltvg
Capital Allocation
Ptvtjlbn

Bulls Say, Bears Say

Bulls

The modernization of APA's production-sharing contract with the government in Egypt makes incremental investment more attractive and has turned a stable cash cow into a lucrative growth asset.

Bears

With operations in Egypt, the company is exposed to geopolitical risk in the Middle East. The Arab Spring in the early 2010s serves as an example of unrest.

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Trading Information

Previous Close Price
$29.18
Day Range
$28.92–29.79
52-Week Range
$28.90–46.15
Bid/Ask
$29.10 / $29.26
Market Cap
$10.86 Bil
Volume/Avg
9.6 Mil / 7.3 Mil

Key Statistics

Price/Earnings (Normalized)
6.03
Price/Sales
1.09
Dividend Yield (Trailing)
3.42%
Dividend Yield (Forward)
3.42%
Total Yield
6.07%

Company Profile

Based in Houston, APA is an independent exploration and production company. It operates primarily in the US, Egypt, the North Sea, and Suriname. At year-end 2023, proved reserves totaled 807 million barrels of oil equivalent, with net reported production of 405 thousand boe/day that year (64% of which was oil and natural gas liquids, with the remainder natural gas).
Sector
Energy
Industry
Oil & Gas E&P
Stock Style Box
Mid Value
Total Number of Employees
2,271
Website
https://www.apacorp.com

Competitors

Valuation

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Metric
APA
EOG
DVN
Price/Earnings (Normalized)
 6.0310.919.36
Price/Book Value
 3.382.612.63
Price/Sales
 1.093.232.15
Price/Cash Flow
 2.546.564.89
Price/Earnings
APA
EOG
DVN

Financial Strength

Metric
APA
EOG
DVN
Quick Ratio
 0.791.960.83
Current Ratio
 1.162.441.07
Interest Coverage
 8.7764.8413.38
Quick Ratio
APA
EOG
DVN

Profitability

Metric
APA
EOG
DVN
Return on Assets (Normalized)
 9.00%16.00%14.30%
Return on Equity (Normalized)
 84.28%25.23%29.77%
Return on Invested Capital (Normalized)
 18.64%21.58%20.25%
Return on Assets
APA
EOG
DVN
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