Analyst Issues Sell Rating for APA Corporation Amid High Valuation and Mixed Outlook

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Mizuho Securities analyst William Janela has maintained their bearish stance on APA stock, giving a Sell rating on July 31.

William Janela has given his Sell rating due to a combination of factors concerning APA Corporation’s financial and operational outlook. Although APA showed some positive developments, such as increased deal synergies and a modest uptick in the US oil guidance, Janela remains cautious. The analyst points out that the initial performance guide set by APA was not impressive, and despite recent improvements, APA still faces high expectations for the second half of 2024. The stock’s recent outperformance, according to Janela, may have already priced in some of the positive news, leaving less room for upside. Furthermore, Janela highlights concerns such as APA’s third-quarter production guidance falling short of expectations and the need for the company to exceed its updated guidance to win investor confidence. He also notes that while Suriname’s project progress is in line with expectations and APA has increased its acreage in Alaska, these developments do not necessarily justify a more optimistic rating at this time. The valuation metrics suggest APA is trading at a premium compared to peers, reinforcing Janela’s perspective that the current stock price does not offer a compelling investment case, leading to his Sell recommendation with a price target of $35.

In another report released on July 31, Bank of America Securities also maintained a Sell rating on the stock with a $31.00 price target.

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APA (APA) Company Description:

Apache Corp. operates as an energy company, which engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids. The company was founded by Truman Anderson, Raymond Plank, and Charles Arnao on December 6, 1954 and is headquartered in Houston, TX.

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Analyst Issues Sell Rating for APA Corporation Amid High Valuation and Mixed Outlook

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