Houston, Texas-based APA Corporation (APA) operates as an independent energy company that explores, develops, and produces natural gas, crude oil, and natural gas liquids. With a market cap of $9.1 billion, APA’s oil and gas operations span the U.S., Egypt, North Sea, and Suriname.
Companies worth $2 billion or more are generally described as "mid-cap stocks," APA fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the oil and gas exploration and production industry.
Despite its strengths, APA has slipped 46.9% from its 52-week high of $43.58 achieved on Oct. 19, 2023. APA has dipped 19.2% over the past three months, underperforming the SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) 11.9% decline during the same time frame.
Over the longer term, APA declined 35.5% in 2024 and 43.6% over the past 52 weeks, lagging behind XOP’s decline of 6.5% on a YTD basis and 12% over the past year.
To confirm the bearish trend, APA has been consistently trading below its 200-day moving average since early November 2023 and mostly below its 50-day moving average since mid-October 2023 with some fluctuations.
Despite reporting better-than-expected results, APA experienced a marginal decline in the trading session after the release of its Q2 earnings on Jul. 31. The company reported an impressive 41.6% year-over-year revenue growth to $2.5 billion, exceeding Wall Street’s expectations. Additionally, its net income attributable to common shareholders surged 42%, totaling $541 million, while its adjusted EPS of $1.17 surpassed the consensus estimates by 23.2%.
The decline in APA’s stock prices over the past year can be attributed to the lackluster performance of the overall oil and gas production industry. The oil and gas production has plateaued due to reduced drilling activity and lower prices since mid-2022. The crude and condensate production has remained flat since October 2023, and oil prices have fallen considerably over the past two years, leading to a decrease in drilling rigs. Furthermore, production is expected to remain stagnant through 2024 and into 2025, resulting in declining investor confidence in the industry.
APA’s competitor, Marathon Oil Corporation (MRO), has dipped 1.6% over the past year and gained 7.1% in 2024, outperforming APA.
Among the 25 analysts covering the APA stock, the consensus rating is a “Hold.” The mean price target of $36.27 suggests a potential upside of 56.7% from current price levels.
On the date of publication, Aditya Sarawgi 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.
