APA Group (AU:APA)
ASX:APA
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APA Group
(Sydney:APA)
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Rating:66Neutral
Price Target:
AU$10.50
▲(5.63% Upside)
Action:ReiteratedDate:02/19/26
The score is primarily held back by mixed financial fundamentals—profit and revenue pressure alongside high leverage—despite solid cash-flow trends. Technicals are supportive with a clear uptrend, and the latest earnings call was broadly positive on EBITDA momentum, distributions, and funded growth pipeline, while valuation remains a notable risk due to the very high P/E.
Positive Factors
Contracted & Regulated Revenues
APA's core revenue is driven by long‑term capacity contracts and regulated tariffs, creating durable, predictable cash flows less exposed to commodity price swings. This business model supports steadier operating cash generation and underpins distributions and funding for multi-year infrastructure projects.
Negative Factors
High Leverage
Material leverage and a low equity ratio raise refinancing and interest‑rate sensitivity over the medium term. Higher debt increases cash interest outflows, limits capital flexibility for opportunistic investments, and amplifies the earnings impact of project delays or lower-than-expected contract uptake.
Read all positive and negative factors
Positive Factors
Negative Factors
Contracted & Regulated Revenues
APA's core revenue is driven by long‑term capacity contracts and regulated tariffs, creating durable, predictable cash flows less exposed to commodity price swings. This business model supports steadier operating cash generation and underpins distributions and funding for multi-year infrastructure projects.
Read all positive factors
APA Group (APA) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$12.93B
Dividend Yield6.26%
Average Volume (3M)3.06M
Price to Earnings (P/E)36.0
Beta (1Y)0.16
Revenue Growth4.61%
EPS Growth-90.28%
CountryAU
Employees2,700
SectorUtilities
Sector Strength65
IndustryRegulated Gas
Share Statistics
EPS (TTM)0.07
Shares Outstanding1,323,751,500
10 Day Avg. Volume2,767,684
30 Day Avg. Volume3,056,200
Financial Highlights & Ratios
PEG Ratio-1.19
Price to Book (P/B)5.51
Price to Sales (P/S)3.37
P/FCF Ratio33.07
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$8.98Price Target Upside-9.70% Downside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)0.18
Revenue Forecast (FY)AU$3.19B
APA Group Business Overview & Revenue Model
Company Description
APA Group engages in energy infrastructure business in Australia. The company operates through three segments: Energy Infrastructure, Asset Management, and Energy Investments. It operates natural gas pipelines, electricity interconnectors, gas fir...
How the Company Makes Money
APA primarily makes money by providing regulated and contract-based energy infrastructure services, with revenue largely underpinned by long-term arrangements linked to the availability and contracted capacity of its assets rather than direct expo...
APA Group Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Positive
The call presented a strong operational and financial picture: underlying EBITDA growth (+7.6%), significant margin expansion (+280bps to 77.3%), material corporate cost reductions (-13.6%) and an expanded $3bn organic pipeline supported by balance sheet capacity (S&P threshold change ~A$1bn). Management reaffirmed distribution guidance and highlighted project commitments (Stage 3A compressors, Stage 3B long-lead items, Brigalow 400MW plant) and completed works (Sturt Plateau). Countervailing issues include customer contracting delays tied to the federal Gas Market Review, merchant/underwriting risk on larger pipeline expenditure (Stage 3B), higher interest and tax cash outflows impacting free cash flow, and several one-off statutory charges. On balance the positive financial momentum, margin gains, cost savings and clear funding flexibility outweigh near-term execution and policy risks.Positive Updates
Underlying EBITDA Growth
Underlying EBITDA increased 7.6% in 1H FY26, driven by inflation-linked tariffs, earnings from new assets (Kurri Kurri lateral, Atlas to Ready Creek, Port Hedland Solar & BESS) and cost reductions.
Negative Updates
Customer Contracting & Policy Uncertainty
Some customers are delaying long-term transport commitments pending the federal Gas Market Review / domestic reservation outcomes, creating near-term uncertainty for Stage 3B pipeline underwriting and timing of customer offtake commitments.
Read all updates
Q2-2026 Updates
Positive
Negative
Underlying EBITDA Growth
Underlying EBITDA increased 7.6% in 1H FY26, driven by inflation-linked tariffs, earnings from new assets (Kurri Kurri lateral, Atlas to Ready Creek, Port Hedland Solar & BESS) and cost reductions.
Read all positive updates
Company Guidance
APA told investors it expects FY‑26 EBITDA to finish above the guided midpoint after a strong H1 (underlying EBITDA +7.6% and margins up 280bps to 77.3%), reconfirmed distribution guidance of $0.58 per security for FY‑26 (H1 distribution $0.275, +1.9%), and maintained foundational and stay‑in‑business CapEx guidance while increasing its organic growth pipeline from $2.1bn to ~ $3bn for FY‑26–28 (funding in excess of that pipeline available from the balance sheet, S&P threshold modification adding ~ $1bn of capacity and no ordinary equity issuance required aside from the DRP); H1 free cash flow was $556m (full‑year FCF expected broadly flat), corporate costs were $70m (down 13.6%) and management is on track to hit a $50m FY‑26 cost‑reduction target, with capital allocation focused on projects that deliver returns at least 150bps above post‑tax WACC; materially, APA has committed $260m to Stage 3A (3 compressors) and $220m to Stage 3B long‑lead pipe (342km of 28″ line pipe) of the East Coast Gas Grid expansion (Stage 3 ~ $800m total), says Stage 3A will boost north→south capacity ~11% (Northern→Victoria +20%) and be ready by winter 2028, and highlights a $100bn+ addressable market and Pilbara assets generating ~ $140m EBITDA last year (≈10% yield).APA Group Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
55
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.17B | 3.14B | 3.03B | 2.83B | 2.69B | 2.56B |
| Gross Profit | 1.06B | 1.00B | 2.81B | 947.00M | 911.02M | 923.86M |
| EBITDA | 2.09B | 1.94B | 2.62B | 1.70B | 1.66B | 1.36B |
| Net Income | 162.00M | 99.00M | 978.00M | 263.00M | 230.56M | -42.17M |
Balance Sheet | ||||||
| Total Assets | 19.16B | 19.94B | 19.56B | 16.52B | 16.20B | 15.12B |
| Cash, Cash Equivalents and Short-Term Investments | 170.00M | 800.00M | 676.00M | 513.00M | 940.28M | 663.04M |
| Total Debt | 13.26B | 14.02B | 12.99B | 11.59B | 10.96B | 9.99B |
| Total Liabilities | 16.39B | 17.27B | 16.32B | 14.61B | 13.57B | 12.17B |
| Stockholders Equity | 2.77B | 1.92B | 3.25B | 1.91B | 2.63B | 2.95B |
Cash Flow | ||||||
| Free Cash Flow | 386.00M | 320.00M | 60.00M | 26.00M | 508.22M | 618.03M |
| Operating Cash Flow | 1.20B | 1.28B | 1.16B | 1.21B | 1.20B | 1.05B |
| Investing Cash Flow | -818.00M | -947.00M | -2.66B | -969.00M | -1.27B | -432.02M |
| Financing Cash Flow | -1.53B | -212.00M | 1.66B | -664.00M | 360.66M | -1.14B |
APA Group Technical Analysis
Positive
9.94
Price Trends
9.38
Positive
9.15
Positive
8.85
Positive
Market Momentum
0.15
Positive
59.85
Neutral
30.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:APA, the sentiment is Positive. The current price of 9.94 is above the 20-day moving average (MA) of 9.78, above the 50-day MA of 9.38, and above the 200-day MA of 8.85, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 59.85 is Neutral, neither overbought nor oversold. The STOCH value of 30.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:APA.
APA Group Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | AU$20.93B | 8.87 | 10.39% | 5.30% | 6.48% | 6.25% | |
66 Neutral | AU$12.93B | 36.03 | 6.91% | 6.26% | 4.61% | -90.28% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
54 Neutral | AU$6.44B | 16.66 | -2.11% | 5.17% | 5.96% | -113.79% |
* Utilities Sector Average
AU:APA
APA Group
9.94
2.28
29.78%
AU:AGL
AGL Energy
9.50
-0.26
-2.68%
AU:ORG
Origin Energy Limited
12.47
2.78
28.74%
APA Group Corporate Events
Moody’s Affirms APA Group Rating, Underscoring Capacity to Fund Growth
Apr 13, 2026
APA Group, the ASX-listed energy infrastructure company that owns and operates extensive gas transmission, storage and power generation assets across Australia, has built a portfolio exceeding $20 billion, including key gas and electricity infrast...
APA Group exits Allgas stake in push to streamline energy portfolio
Mar 25, 2026
APA Group has completed the sale of its 20% equity stake in GDI (EII) Pty Ltd, which owns the Allgas Network, as part of a broader transaction in which Stonepeak will acquire full ownership of GDI. The move follows the earlier divestment of APA...
APA Group Director Increases Holding Through Distribution Reinvestment Plan
Mar 22, 2026
APA Group has reported a change in the interests of director Rhoda Harrington, reflecting routine participation in the company’s distribution reinvestment plan. Harrington acquired 687 ordinary stapled securities indirectly through Phillippo...
APA Director Increases Indirect Stake via Distribution Reinvestment Plan
Mar 22, 2026
APA Group has disclosed a change in director Nino Ficca’s relevant interest in the company’s securities, following his participation in the company’s Distribution Reinvestment Plan. Through an indirect holding with Mrs Judy Ficca...
APA Group Director Increases Indirect Holding via Distribution Reinvestment Plan
Mar 22, 2026
APA Group has disclosed a change in director James Fazzino’s indirect holdings in the company following participation in its Distribution Reinvestment Plan. Through Stefenna Pty Ltd, Fazzino acquired 1,563 additional ordinary stapled securit...
APA Group Seeks ASX Quotation for New Stapled Securities
Mar 17, 2026
APA Group has applied to the ASX for quotation of 8,570,397 new fully paid stapled securities, to be issued on 18 March 2026 under a dividend or distribution plan. The additional units will expand the number of APA securities on issue, modestly br...
APA Wins AER Backing for $459.5m Basslink Revenue and Regulatory Shift
Feb 27, 2026
APA Group has welcomed the Australian Energy Regulator’s final decision on its Basslink revenue proposal, which sets allowed revenue at $459.5 million for the four-year period from 1 July 2026 to 30 June 2030. The ruling paves the way for Ba...
APA Group Updates FX Rate and DRP Pricing for Half‑Year Distribution
Jan 27, 2026
APA Group has updated its previously announced half‑year distribution details for its fully paid stapled securities, covering the six‑month period ended 31 December 2025. The revisions relate specifically to the New Zealand dollar exch...
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.