TD Cowen analyst David Deckelbaum maintained a Hold rating on APA yesterday and set a price target of $20.00.
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David Deckelbaum’s rating is based on APA’s solid execution throughout the year, marked by significant cost-cutting measures and an improved production outlook for both U.S. oil and Egyptian gas. The company’s third-quarter performance exceeded expectations with a 4% production beat and a 10% EBITDAX increase, alongside better-than-expected capital expenditure, resulting in free cash flow that was 20% above consensus. These positive outcomes are likely to elicit a favorable market response.
Despite these achievements, the Hold rating reflects a cautious stance due to ongoing challenges. While APA’s cost reduction initiatives are progressing well, with expectations to achieve full savings by year-end 2025, there are still uncertainties regarding the long-term sustainability of these improvements. Additionally, while the company has made strides in reducing its net debt, it remains committed to further reductions, which may impact its financial flexibility. These factors contribute to a balanced view, justifying the Hold rating.
Deckelbaum covers the Energy sector, focusing on stocks such as APA, Sable Offshore, and Coterra Energy. According to TipRanks, Deckelbaum has an average return of 3.6% and a 38.12% success rate on recommended stocks.
In another report released yesterday, Roth MKM also maintained a Hold rating on the stock with a $23.00 price target.