Houston, Texas-based APA Corporation (APA) explores for, develops, and produces natural gas, crude oil, and natural gas liquids. With a market cap of $8.1 billion, the company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally.
Companies worth $2 billion or more are generally described as “mid-cap stocks,” and APA fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the oil & gas E&P industry. APA's expertise in exploration and production, cost management, and the integration of advanced technologies drives competitiveness. Its commitment to sustainability aligns with global energy transition goals, focusing on reducing emissions and balancing energy security, enhancing APA’s reputation and regulatory compliance.
Despite its notable strength, APA slipped 42.3% from its 52-week high of $37.82, achieved on Dec. 27, 2023. Over the past three months, APA stock fell 5.7%, underperforming the S&P 500 Index’s ($SPX) 5.1% gains during the same time frame.
In the longer term, shares of APA declined 23.7% over the past six months and dipped 41.4% over the past 52 weeks, significantly underperforming SPX’s six-month gains of 10.2% and 26.5% returns over the last year.
To confirm the bearish trend, APA has been trading below its 200-day moving average over the past year. The stock is trading below its 50-day moving average since early August.
APA’s underwhelming performance was driven by concerns over declining natural gas prices and elevated inventory levels. The company is particularly struggling in the Permian dry gas sector, where plummeting prices have posed significant challenges.
On Nov. 6, APA shares closed up more than 4% after reporting its Q3 results. Its revenue stood at $2.5 billion, up 9.7% year over year. The company’s adjusted EPS was $1, missing analyst estimates of $1.03.
APA’s rival, ConocoPhillips (COP), has taken the lead over the stock, declining 14.7% over the past six months and 18.6% over the past 52 weeks.
Wall Street analysts are cautious on APA’s prospects. The stock has a consensus “Hold” rating from the 26 analysts covering it, and it has a mean price target of $30.56, suggests a potential upside of 39.9% from current price levels.
