Stephens starts APA with Equal Weight on risk of S&P 500 exit

Stephens last night initiated coverage of APA Corp. (APA) with an Equal Weight rating and $24 price target The company offers “differentiated” exploration exposure and a solid balance sheet, the analyst tells investors in a research note. However, the firm sees risk of near-term migration from the S&P 500 Index, pointing out APA ranks as the third smallest member of the index. This could put the company at heightened risk of migration to the S&P SmallCap 600 Index and passive fund selling pressure of 5% of its float, contends Stephens.