Apache (APA, Financial) has seen a notable increase in bullish options activity, as evidenced by the trading of 17,639 call options, which is double the expected amount. The implied volatility has risen by more than 6 points, reaching 46.72%. Among the most active options are the weekly 19 calls for June 6 and the June 26 puts at a strike price of 17.5, with nearly 15,600 contracts traded for these options alone. The current Put/Call Ratio stands at 0.22, suggesting a strong preference for call options. Investors are keeping an eye on Apache's upcoming earnings report, anticipated on August 6th.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 26 analysts, the average target price for APA Corp (APA, Financial) is $22.41 with a high estimate of $35.00 and a low estimate of $14.00. The average target implies an upside of 25.60% from the current price of $17.85. More detailed estimate data can be found on the APA Corp (APA) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, APA Corp's (APA, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for APA Corp (APA, Financial) in one year is $25.08, suggesting a upside of 40.54% from the current price of $17.845. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the APA Corp (APA) Summary page.
APA Key Business Developments
Release Date: May 08, 2025
- Net Income: $347 million or $0.96 per diluted share.
- Adjusted Net Income: $385 million or $1.06 per share.
- Free Cash Flow: $126 million in the first quarter.
- Gas Production in Egypt: Average realized gas price of $3.19, exceeding guidance of $3.15.
- Capital Investment: First quarter upstream capital below guidance.
- Cost Savings: $800,000 in cost savings per well in the Permian.
- Asset Sale: New Mexico Permian properties sold for $608 million.
- Debt Reduction: Proceeds from asset sale to be allocated towards debt reduction.
- Gas Marketing Income: Updated guidance to $575 million for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- APA Corp (APA, Financial) delivered strong first quarter results with production in line and lower capital investment relative to guidance.
- Significant improvements in drilling performance led to capital coming in below guidance, particularly in the Permian.
- In Egypt, gas production exceeded guidance due to outperformance from recent development programs and optimized infrastructure.
- The company announced a second discovery, Sockeye-2, in the Brookian play, indicating promising exploration potential.
- APA Corp (APA) is making substantial progress on cost reduction initiatives, increasing 2025 savings targets to $130 million and annualized run rate savings to $225 million.
Negative Points
- The company is experiencing upward pressure on certain operating costs in the Permian, such as water handling and compression.
- Despite progress, achieving meaningful LOE savings is proving challenging due to inflationary pressures in areas like compression and water disposal.
- The asset sale of New Mexico Permian properties, while strategic, represents a full exit from New Mexico, potentially limiting future opportunities in that region.
- There is a need for extended execution time frames to achieve substantial long-term cost reductions in certain areas.
- The company faces volatility in Waha pricing, impacting the economic viability of drilling in Alpine High.
