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APA (APA)
NASDAQ:APA
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APA
(NASDAQ:APA)
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Rating:74Outperform
Price Target:
$41.00
▲(7.72% Upside)
Action:ReiteratedDate:02/26/26
The score is driven primarily by improved financial resilience (strong cash generation and a strengthened balance sheet), supported by constructive technical trend signals. Valuation is a notable positive due to a low P/E and solid dividend yield, while guidance and call commentary add confidence but with acknowledged near-term cost and operational headwinds.
Positive Factors
Strong free cash flow
Consistent, high free cash flow provides durable funding for prioritized capital spending, debt reduction, and shareholder returns. Over multiple cycles this strengthens financial flexibility, enables a sustained capital program in the Permian and international projects, and reduces refinancing risk.
Large, high-quality Permian inventory
A deep, low-cost inventory supports multi-year drilling optionality and production stability. This structural resource base permits disciplined pacing of activity, preserves margin upside as D&C efficiencies persist, and underpins long-term reserve replacement and cash generation.
Material balance-sheet improvement
Meaningfully lower net debt and explicit targets improve solvency and reduce interest burden, increasing resilience to commodity downturns. Stronger leverage metrics expand strategic optionality for disciplined M&A, capex funding, and shareholder returns over the medium term.
Negative Factors
Revenue and earnings volatility
Commodity-driven swings in top-line and earnings create persistent unpredictability in cash conversion and planning. That cyclicality complicates capital allocation, raises the need for higher liquidity buffers, and can force procyclical asset sales or curtailed investments during downturns.
Higher decommissioning/ARO spend
Elevated ARO and decommissioning obligations are structural cash drains that reduce free cash available for growth or returns. As fields age and regulatory expectations rise, these non-discretionary costs can persistently pressure FCF and limit balance-sheet repair or shareholder distributions.
Trading/marketing income sensitivity
Material reliance on marketing/trading spreads adds structural earnings and cashflow exposure to midstream capacity and regional differentials. If takeaway capacity expands and spreads compress, a large, repeatable cash engine could shrink, reducing predictable free cash over time.
APA (APA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.93B
Dividend Yield3.8%
Average Volume (3M)7.62M
Price to Earnings (P/E)6.1
Beta (1Y)0.94
Revenue Growth4.88%
EPS Growth-41.34%
CountryUS
Employees1,791
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.91
Shares Outstanding353,251,460
10 Day Avg. Volume8,437,027
30 Day Avg. Volume7,616,398
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)1.44
Price to Sales (P/S)0.98
P/FCF Ratio4.94
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue1.99
Enterprise Value/Gross Profit5.22
Enterprise Value/Ebitda3.25
Forecast
1Y Price Target
$28.56Price Target Upside-24.96% Downside
Rating ConsensusHold
Number of Analyst Covering20
EPS Forecast (FY)2.72
Revenue Forecast (FY)$7.46B
APA Business Overview & Revenue Model
Company DescriptionAPA Corporation, through its subsidiaries, explores for, develops, and produces oil and gas properties. It has operations in the United States, Egypt, and the United Kingdom, as well as has exploration activities offshore Suriname. The company also operates gathering, processing, and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines. APA Corporation was founded in 1954 and is based in Houston, Texas.
How the Company Makes MoneyAPA makes money primarily by producing and selling hydrocarbons—crude oil, natural gas, and natural gas liquids (NGLs)—from its operated and non-operated upstream assets. Revenue is recognized when these commodities are delivered to purchasers under sales agreements, with realized prices influenced by global and regional benchmark prices (e.g., WTI/Brent for oil and Henry Hub and local indices for gas), location differentials, quality adjustments, and transportation/marketing arrangements. Key revenue streams include (1) crude oil sales, typically the largest contributor during higher oil-price environments; (2) natural gas sales, driven by production volumes and regional gas pricing; and (3) NGL sales (such as propane and butane), priced off NGL market indices and product mix. Earnings and cash flow are also affected by the company’s hedging program (derivative contracts that can generate gains/losses and stabilize cash flows), royalty and production tax structures, operating costs, and capital spending efficiency. In some periods, APA may also generate cash from asset sales, farm-outs, or other portfolio actions, but the ongoing core revenue model is upstream commodity production and sales. Specific material partnership terms and counterparty arrangements are not publicly disclosed in full detail in all cases; null.
APA Key Performance Indicators (KPIs)
Any
Daily Oil Volume by Geography
Monitors oil production levels in various regions, indicating operational scale, regional strengths, and exposure to geopolitical or market risks.
Monitors oil production levels in various regions, indicating operational scale, regional strengths, and exposure to geopolitical or market risks.
Data provided by:
The Fly
The FlyAPA Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call was broadly positive. Management highlighted substantial operational progress: significant and ahead-of-plan cost reductions, strong free cash flow generation (> $1B in 2025), meaningful reserve growth (+9% y/y) and improved Permian capital efficiency with large economic and technical inventory. They provided disciplined 2026 guidance (total portfolio spend $2.1B, Permian capex ~$1.3B, Egypt capex ~$500M) and clear paths to further savings and balance-sheet improvement (net debt down ~$1.4B in 2025 with a $3B target). Near-term negatives include a Q4 Egypt pipeline disruption, anticipated slight LOE pressure in 2026, higher decommissioning spend and modest production impact from exiting a noncore concession. Trading income is a material positive but subject to market/takeaway dynamics. Overall, the strengths and achievable catalysts (cost leadership, large Permian inventory, gas growth in Egypt, Suriname upside) materially outweigh the near-term operational and market headwinds.Q4-2025 Updates
Positive Updates
Cost Reductions Achieved Ahead of Plan
Captured over $300 million of savings in 2025 and exited the year at a $350 million controllable-spend run rate (target achieved two years early). Management expects incremental reductions in 2026 and a run rate of $450 million by year-end 2026, with a further $200 million decline in controllable spend expected in 2026.
Strong Free Cash Flow and Capital Returns
Generated more than $1.0 billion of free cash flow in 2025; returned approximately $640 million to shareholders (about 63% of free cash flow). Fourth quarter free cash flow was $425 million, with $154 million returned to shareholders in the quarter.
Material Balance-Sheet Improvement
Net debt ended 2025 just below $4.0 billion, down approximately $1.4 billion versus year-end 2024. Interest expense was roughly $80 million lower versus 2024. Company reiterates long-term net-debt target of $3.0 billion.
Reserves and Replacement Performance
Proved reserves increased approximately 9% year-over-year to surpass 1.0 billion BOE. All-in reserve replacement ratio exceeded 160% for 2025, achieved despite a 13% year-over-year decline in SEC oil prices.
Permian Operational and Cost Efficiency Gains
Permian exceeded oil production guidance every quarter in 2025 on a lower-than-planned capital budget. Drilling & completion efficiencies improved materially: average D&C costs of ~$595 per lateral foot (Midland) and ~$750 per lateral foot (Delaware); management cited wells as low as <$500/ft (Midland) and <$700/ft (Delaware) in late 2025 and referenced ~30% improvement on D&C per foot versus prior periods.
Large, High-Quality Permian Inventory
Characterized ~1,700 operated locations in economic inventory (10%+ ROR threshold) and roughly another ~1,700 locations in technical upside. Company confident it can sustain current oil production for at least the next 10 years; a planned 4-well First Bone Spring appraisal could convert up to ~1 year of drilling activity from technical upside into economic inventory.
Egypt Gas Growth Momentum
Egypt transitioned to a gas-focused campaign under a new pricing framework. Management expects to deliver ~540-550 MMcf/d gross gas in 2026 (up from 501 MMcf/d reported in Q4 after temporary pipeline disruptions were resolved). 2026 Egypt capital plan of approximately $500 million aimed at slight BOE growth and sustained gas growth.
High-Value Trading & Marketing Contribution
Oil and gas trading and marketing remained a significant contributor to cash generation: management expects approximately $650 million of pretax income from trading/marketing in 2026 and nearly $2 billion of cumulative pretax income from 2020–2025.
Progress on Suriname and Exploration
Advancing GranMorgu development in Suriname with ~$230 million allocated in 2026 and partner (Total) execution continuing; first oil targeted mid-2028. Exploration spend of ~$70 million in 2026 (including Alaska prep and a return to Suriname Block 58 late in Q4); Alaska Sockeye discovery supports appraisal plans in early 2027.
Negative Updates
Egypt Q4 Gas Miss and Pipeline Disruption
Gross gas production in Egypt was 501 MMcf/d in Q4 and came in below guidance due to unplanned temporary pipeline disruptions late in the quarter (operations since resumed), which weighed on Q4 gas volumes.
Near-Term LOE and Market Headwinds
While LOE came in below guidance for Q4 driven by cost initiatives, management expects 2026 LOE to be slightly above 2025 due to market-related headwinds (primarily in the Permian and North Sea). The company is investing ~$100 million in LOE-reduction projects in the Permian but expects some offsetting pressures in 2026.
Increased Decommissioning / ARO Spend
Combined gross decommissioning and asset-retirement spending is expected to increase to approximately $280 million in 2026 (net ~ $225M after North Sea tax benefits), representing higher near-term cash outflow relative to prior periods.
Small Concession Exit Reduces Volumes
Elected to withdraw from a small noncore Egyptian concession (outside merged concession area and not benefiting from the new gas-pricing framework). Company noted the concession did not generate free cash flow but the exit will modestly reduce oil and gas production volumes.
Q4 Non-Core Accounting Impacts
GAAP Q4 included non-core after-tax items: ~$36 million of noncash impairments and ~$29 million of unrealized hedge losses (partially offset by a $47 million decommissioning-contingency gain), producing consolidated net income of $279 million (GAAP) and adjusted net income of $324 million.
Trading Income Sensitivity to Midstream Capacity
Management noted 2026 marketing/trading benefit could moderate over time as additional Permian takeaway capacity comes online (wider takeaway may compress spreads). They expect the $650M pretax trading contribution to come down in subsequent years if regional spreads tighten.
Weather-Related Downtime Risk into 1Q26
Despite excellent Permian uptime in Q4, management reported ~3,000 bpd of weather-related downtime already in Q1 2026 and acknowledged first-quarter weather can be materially disruptive compared with Q4 performance.
Company Guidance
The company guided to a disciplined $2.1 billion portfolio spend in 2026 (down ~10% y/y) with U.S. development capital of roughly $1.3 billion (Permian ~$1.2B + $100M base projects), ~ $500 million in Egypt, ~$230 million for GranMorgu in Suriname and ~$70 million for exploration (≈$20M Alaska prep, ~$50M late‑Q4 Suriname), targeting U.S. oil production roughly flat at 120–122k bbl/d, Egypt gas of ~540–550 MMcf/d and slight year‑over‑year BOE growth in Egypt; key financial metrics include >$1.0 billion free cash flow in 2025 (Q4 FCF $425M), ~ $640M returned to shareholders (≈63% of FCF) and net debt just under $4.0B (down ≈$1.4B vs. 2024; $3.0B long‑term target). Operational and portfolio metrics: ~450k net Permian acres (>95% held), ~1,700 locations in economic inventory and ~1,700 in technical upside, 2025 D&C averages of ~$595/ft (Midland) and ~$750/ft (Delaware) with some later wells < $500/$700 per foot, proved reserves +9% to >1.0B BOE and >160% reserve replacement, expected controllable‑spend savings exiting 2026 of ~$450M run‑rate (exited 2025 at $350M after >$300M captured) plus an incremental ~$200M reduction in 2026, a $100M Permian LOE project set to lower LOE by ~$3–3.5M/month (annualized $40–50M savings, ~1–2 year payback), decommissioning gross spend ≈$280M (net ≈$225M after tax), and oil & gas marketing/trading expected to contribute ~ $650M pretax in 2026.APA Financial Statement Overview
Summary
Strong and consistently positive operating cash flow with very high 2025 free cash flow supports a solid score, and leverage has improved materially to a healthier debt-to-equity by 2025. Offsetting this, revenue and earnings have been volatile since 2022 and free-cash-flow conversion weakened in 2023–2024, reflecting commodity and capex cyclicality.Income Statement
Profitability rebounded strongly after the 2020 loss, with solid net margins in 2021–2023 and a still-healthy ~16% net margin in 2025. However, revenue has been volatile (strong growth in 2021–2022, then declines in 2023 and 2025), and profits also fluctuated materially (very high in 2022–2023, down in 2024, then back up in 2025). Margin data for 2025 is incomplete (only net margin available), limiting visibility into operating-level profitability that year.62
Positive
Balance Sheet
Leverage has improved meaningfully over time, with debt-to-equity moving from very stressed levels (negative equity in 2020–2021 and extremely high leverage in 2022) to a much healthier position by 2025 (debt-to-equity ~0.38) alongside a larger equity base. Total debt is also down versus the 2020 peak. Key watchout: the balance sheet has historically been volatile (large swings in equity and returns on equity), which is typical for the sector but still raises risk around cyclicality and asset value changes.68
Positive
Cash Flow
Cash generation is a clear strength: operating cash flow has been consistently positive and strong, and 2025 free cash flow is very high (and equals operating cash flow in the provided data). Cash flow has generally covered accounting earnings well, with operating cash flow running above net income in most years and improving coverage in 2025. The main weakness is variability in free cash flow conversion in 2023–2024 (free cash flow was a relatively small portion of net income), indicating sensitivity to capital spending and commodity-driven cycles.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.92B | 9.74B | 8.28B | 11.07B | 7.99B |
| Gross Profit | 3.33B | 4.30B | 4.23B | 6.25B | 3.54B |
| EBITDA | 5.43B | 4.17B | 4.75B | 7.61B | 3.66B |
| Net Income | 1.43B | 804.00M | 2.85B | 3.67B | 1.14B |
Balance Sheet | |||||
| Total Assets | 19.00B | 19.39B | 15.24B | 13.15B | 13.30B |
| Cash, Cash Equivalents and Short-Term Investments | 516.00M | 625.00M | 87.00M | 245.00M | 302.00M |
| Total Debt | 4.81B | 6.16B | 5.30B | 5.62B | 7.61B |
| Total Liabilities | 11.99B | 13.03B | 11.55B | 11.80B | 14.02B |
| Stockholders Equity | 6.09B | 5.28B | 2.65B | 423.00M | -1.59B |
Cash Flow | |||||
| Free Cash Flow | 1.78B | 769.00M | 772.00M | 2.54B | 2.39B |
| Operating Cash Flow | 4.54B | 3.62B | 3.13B | 4.94B | 3.50B |
| Investing Cash Flow | -2.15B | -924.00M | -2.14B | -1.51B | -833.00M |
| Financing Cash Flow | -2.50B | -2.16B | -1.15B | -3.49B | -2.62B |
APA Technical Analysis
Positive
38.06
Price Trends
28.40
Positive
26.30
Positive
23.43
Positive
Market Momentum
2.09
Negative
78.78
Negative
94.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APA, the sentiment is Positive. The current price of 38.06 is above the 20-day moving average (MA) of 31.75, above the 50-day MA of 28.40, and above the 200-day MA of 23.43, indicating a bullish trend. The MACD of 2.09 indicates Negative momentum. The RSI at 78.78 is Negative, neither overbought nor oversold. The STOCH value of 94.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APA.
APA Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.15B | 6.96 | 13.92% | 3.14% | 14.77% | -17.38% | |
75 Outperform | $7.42B | 120.54 | 0.54% | 5.73% | 8.43% | -86.63% | |
74 Outperform | $12.93B | 6.12 | 24.51% | 3.80% | 4.88% | -41.34% | |
72 Outperform | $10.23B | 12.75 | 15.87% | 1.00% | 23.88% | 20.55% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $5.45B | 42.92 | 2.03% | 4.15% | -13.92% | -68.34% | |
54 Neutral | $6.07B | 17.04 | 16.88% | ― | 35.41% | ― |
* Energy Sector Average
APA
APA
36.61
17.05
87.18%
CRK
Comstock Resources
20.63
0.79
3.98%
MTDR
Matador Resources
57.58
6.87
13.55%
MUR
Murphy Oil
38.17
12.65
49.56%
RRC
Range Resources
43.48
3.60
9.02%
CHRD
Chord Energy
130.58
25.33
24.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.