Scotiabank maintains Apache Corp at sector perform, $30 target By Investing.com

On Monday, Scotiabank reaffirmed its Sector Perform rating on Apache Corp (NASDAQ:) with a steady price target of $30.00. The affirmation comes after a thorough review of Apache’s latest supplemental quarterly information, which was released on Sunday. The updated estimates by Scotiabank now project an adjusted earnings per share (EPS) and cash flow per share (CFPS) of $0.93 and $2.99, respectively.

The analysis by Scotiabank indicates that Apache’s gas and liquids (NGL) curtailments surpassed initial projections but matched what the bank had anticipated in its models. Additionally, following the acquisition of Callon (NYSE:) Petroleum, Apache refrained from providing second-quarter 2024 depreciation, depletion, and amortization (DD&A) guidance. However, the company is now indicating a consolidated DD&A figure of $590 million.

Dry hole expenses for Apache amounted to approximately $55 million, which was higher than Scotiabank had expected. Meanwhile, the company experienced a favorable outcome in its Egypt operations, with tax barrels amounting to 38 thousand barrels of oil equivalent per day (mboe/d), surpassing the initial guidance of 35 mboe/d.

Furthermore, Apache reported a net gain of $130 million from oil and gas purchases and sales activities. This financial update provides a detailed snapshot of the company’s recent performance and fiscal health as it integrates its recent acquisition and navigates market conditions.

In other recent news, APA Corporation has been the subject of various analyst adjustments. TD Cowen maintained its hold rating on Apache Corp with a steady price target of $36.00, while Truist Securities revised its price target for the company, reducing it to $52.00. Evercore ISI downgraded Apache Corp’s stock from Outperform to In Line, adjusting the price target to $39.00. Other firms such as Wells Fargo Securities and RBC Capital Markets have assigned Apache Corp an Overweight and a Sector Perform rating, respectively.

The company has been strategically curtailing the production of gas and gas liquids in response to unfavorable pricing, with expectations that future prices may see an improvement. Apache Corp has also reported repurchasing 1.5 million shares within the quarter, part of its ongoing efforts to manage its share count and return value to shareholders.

In addition, APA Corporation recently sold its non-core assets in two transactions, generating over $700 million, which will primarily be used to lower near-term borrowings. This move aligns with APA Corporation’s strategy of actively managing its portfolio and monetizing non-core assets at attractive prices.

In a separate development, Morgan Stanley Energy Partners has completed the sale of Durango Permian LLC to Kinetik Holdings Inc. The transaction includes a mix of cash and equity, with additional contingent consideration tied to the launch of the Kings Landing Gas Gathering and Processing Development.

These are the recent developments for Apache Corp. and other related companies.

InvestingPro Insights

Following Scotiabank’s review of Apache Corp (NASDAQ:APA), current metrics from InvestingPro reveal a mixed picture of the company’s financial health and market performance. With a market capitalization of $11.73 billion and a low Price/Earnings (P/E) ratio of 3.51, Apache appears to offer value to investors looking for earnings-driven stocks. Additionally, the company’s Price to Book ratio stands at 4.49, which suggests a premium valuation relative to its book value. In terms of profitability, Apache has been profitable over the last twelve months, with a solid operating income margin of 38.96%.

Apache’s commitment to shareholder returns is evidenced by its impressive track record of maintaining dividend payments for 54 consecutive years, boasting a current dividend yield of 3.34%. While analysts have revised their earnings expectations downwards for the upcoming period, the InvestingPro Tips also highlight a prediction for the company to remain profitable this year. For investors seeking more in-depth analysis, additional tips are available on InvestingPro, including insights on stock price volatility and historical trading patterns. Those interested can unlock further expert tips with the exclusive coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. As of now, there are 7 additional InvestingPro Tips available for Apache Corp, offering a comprehensive view of the company’s prospects.

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