Struggles Continue for APA Corporation Amid a Challenging Energy Market
Houston-based APA Corporation (APA) is engaged in the exploration, development, and production of natural gas, crude oil, and natural gas liquids. The company maintains a market capitalization of $8.1 billion and conducts exploration activities in Suriname, holding additional interests in projects in Uruguay and other international locations.
Significant Underperformance Compared to Market Trends
Over the past year, shares of this independent energy company have notably lagged behind the overall market. APA’s stock has fallen by 39.9%, contrasting sharply with the S&P 500 Index ($SPX), which has surged nearly 35.7%. In 2024, APA’s stock has decreased by 38.6%, while the SPX has recorded a 25.5% increase year-to-date.
Comparative Analysis with Oil & Gas ETFs
Focusing more narrowly, APA’s performance appears less severe compared to the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which has gained approximately 2.2% in the last year. Furthermore, the ETF’s 3.2% increase year-to-date surpasses APA’s significant losses during the same period.
The decline in APA’s performance is primarily linked to concerns surrounding the drop in natural gas prices and ongoing high inventory levels.
Quarterly Earnings Report Shows Mixed Results
On November 6, APA shares rose over 4% following the release of its Q3 results, revealing revenue of $2.5 billion—an increase of 9.7% from the previous year. However, the company’s adjusted earnings per share (EPS) decreased by 24.8% year-on-year to $1.
Analysts project that for the fiscal year ending in December, APA’s EPS will decline by 12.6%, totaling $3.96 on a diluted basis. Historically, APA has struggled to meet expectations, missing consensus estimates in three of the last four quarters and only beating forecasts once.
Market Sentiments and Analyst Ratings
The consensus rating among 25 analysts monitoring APA stock remains a “Hold,” supported by eight “Strong Buy” ratings, 13 “Holds,” one “Moderate Sell,” and three “Strong Sells.” This outlook shows improvement compared to two months ago, when more analysts were recommending sell ratings.
On November 13, JPMorgan Chase & Co. (JPM) maintained a “Neutral” rating while reducing their price target for APA to $25, indicating a possible upside of 13.5% from current levels.
The average price target from analysts stands at $33.12, suggesting a potential 50.4% increase over APA’s current price. Bullishly, the highest estimated price target of $48 represents an ambitious upside of 118%.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are provided for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Nasdaq, Inc.
