Citi ups APA target to $52, opens ‘positive catalyst watch’

Citi analyst Scott Gruber raised the firm’s price target on APA Corp. to $52 from $43 and keeps a Buy rating on the shares. The analyst also opened a “90-day positive catalyst watch” on the shares. APA has lagged peers year-to-date, but a period of “outperformance is forthcoming as multiple catalysts converge,” the analyst tells investors in a research note. A gas sales contract with Cheniere begins in Q3, and the combination of higher commodity prices, growing production volumes and lower capex should drive a doubling of free cash flow from the first half of 2023 to the second half, the analyst tells investors in a research note. Citi expects the company’s cash return to remain “robust,” especially in light of the prior two years when buybacks were Q4-weighted.