APA Group (AU:APA)
ASX:APA
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APA Group
(Sydney:APA)
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Rating:66Neutral
Price Target:
AU$10.00
▲(4.06% 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
Regulated and contract-backed revenue base
APA's cash flows are anchored by long-term capacity contracts and regulated tariffs. That structure reduces commodity exposure and supports predictable revenue and distributions over multi-year horizons, making earnings less cyclical and more resilient to short-term gas price swings.
Negative Factors
High leverage and low equity ratio
Significant leverage increases financing risk and sensitivity to interest rates, limiting strategic flexibility. High debt levels make the company more exposed to rising rates and increase refinancing and covenant risk, which can pressure distributions and capital investment priorities over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated and contract-backed revenue base
APA's cash flows are anchored by long-term capacity contracts and regulated tariffs. That structure reduces commodity exposure and supports predictable revenue and distributions over multi-year horizons, making earnings less cyclical and more resilient to short-term gas price swings.
Read all positive factors
APA Group (APA) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$12.72B
Dividend Yield6.26%
Average Volume (3M)3.06M
Price to Earnings (P/E)36.0
Beta (1Y)0.15
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$8.79Price Target Upside-8.58% Downside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)0.18
Revenue Forecast (FY)AU$3.20B
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 Group generates revenue primarily through the transportation of natural gas via its pipeline network, which includes long-term contracts with customers in the energy sector. The company earns fees based on the volume of gas transported and the...
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
9.61
Price Trends
9.12
Positive
9.04
Positive
8.73
Positive
Market Momentum
0.15
Negative
66.62
Neutral
85.45
Negative
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 9.61 is above the 20-day moving average (MA) of 9.36, above the 50-day MA of 9.12, and above the 200-day MA of 8.73, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 66.62 is Neutral, neither overbought nor oversold. The STOCH value of 85.45 is Negative, 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$21.39B | 8.87 | 15.06% | 5.30% | 6.48% | 6.25% | |
66 Neutral | AU$12.72B | 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$6.59B | 16.66 | -2.11% | 5.17% | 5.96% | -113.79% |
* Utilities Sector Average
AU:APA
APA Group
9.61
2.21
29.94%
AU:AGL
AGL Energy
9.80
-0.17
-1.71%
AU:ORG
Origin Energy Limited
12.46
2.43
24.24%
APA Group Corporate Events
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...
APA Group Announces Lapse of 29,529 Performance Rights
Jan 14, 2026
APA Group has notified the market of the cessation of 29,529 performance rights (ASX code APAAA) that lapsed on 31 December 2025 because the conditions attached to those rights were not met or became incapable of being satisfied. The lapse of thes...
APA Group Sets Date for 1H26 Results and Investor Briefing
Jan 14, 2026
APA Group will release its financial results for the half year ended 31 December 2025 on 19 February 2026 and will host a live audio webcast briefing for analysts and investors the same day. The results presentation, led by CEO Adam Watson and CFO...
APA Group to Divest 20% Stake in Allgas Network as Part of Business Simplification
Dec 17, 2025
APA Group announced it will divest its 20% equity stake in GDI (EII) Pty Ltd, owner of the Allgas Network, to Stonepeak in a deal that will simplify APA’s business strategy. The sale, contributing an estimated $64 million, aligns with APA...
APA Group Releases 2026 Calendar of Key Corporate Events
Dec 10, 2025
APA Group has announced its 2026 calendar of events, detailing key dates for financial results, distributions, and the annual meeting. This announcement provides stakeholders with a timeline for important corporate activities, ensuring transparenc...
APA Group Announces Increased Interim Distribution and Reinvestment Plan
Dec 10, 2025
APA Group announced an estimated interim distribution of 27.5 cents per security for the six months ending 31 December 2025, marking a 1.9% increase from the previous year’s interim distribution. The company expects total distributions for F...
APA Group Announces New Dividend Distribution
Dec 10, 2025
APA Group has announced a new dividend distribution for its fully paid units stapled securities, with a distribution amount of AUD 0.275 per unit. The record date for this distribution is set for December 31, 2025, with payment scheduled for March...
APA Group’s Credit Rating Boosts Growth Funding Capacity
Dec 8, 2025
APA Group has received a positive modification from SP Global Ratings, which has affirmed its BBB (stable) long-term credit rating while lowering the FFO/Debt threshold from 9.5% to 8.5%. This change enhances APA’s capacity to fund growth by...
APA Group Completes Divestment of Gas Distribution Operations
Dec 1, 2025
APA Group has completed the divestment of its Networks business, which includes gas distribution operations and maintenance services. This move is part of APA’s strategy to simplify its business and focus on key growth platforms, as the dive...
APA Group Partners with CS Energy for Brigalow Peaking Power Plant Development
Nov 30, 2025
APA Group has entered into a Joint Development Agreement with CS Energy to develop the Brigalow Peaking Power Plant, a 400MW gas power station in Queensland. This project, expected to be operational by 2028, will enhance APA’s capabilities i...
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.