APA Corporation Faces Decline Ahead of Q4 Earnings Report

APA Corporation is projected to report a profit drop. With an EPS forecast of $1.02 for Q4, a decline from the previous year, investors may be concerned about the company's future performance and stock price.

Date: 24-01-2025

AI Rating: 4

EPS Analysis: For the upcoming fiscal Q4, APA Corporation is expected to report earnings per share (EPS) of $1.02, which shows a decrease of 11.3% from $1.15 EPS reported in the same quarter last year. This declining trend is expected to continue into fiscal 2024, with an anticipated EPS of $4.09 down 9.7% from $4.53 in fiscal 2023 and further declining to $3.58 in fiscal 2025, which reflects continuously disappointing financial performance.

Revenue and Net Income: In the previous quarter, APA reported revenues that grew by 10% year-over-year to $2.5 billion, surpassing consensus estimates by 11.7%. This revenue increase was attributed to the benefits gained from the acquisition of Callon Petroleum, which improved their production levels. However, despite revenue growth, the declining EPS and profit margins suggest that the company is facing challenges in maintaining net income efficiently.

Performance Compared to Market: Over the past 52 weeks, shares of APA have declined by 23.9%, showing a stark contrast to the 25.5% rise in the S&P 500 Index and nearly 14.1% return from the Energy Select Sector SPDR Fund. This underperformance indicates investor skepticism and potential volatility surrounding the stock.

Analyst Ratings: Current analyst ratings are cautious, reflecting a general sentiment of a "Hold" among 26 analysts. Only 7 analysts recommend "Strong Buy," while 15 suggest "Hold," and 4 indicate negative outlooks (1 "Moderate Sell" and 3 "Strong Sell"). This configuration is less bullish than in previous months and might intensify the investors' concerns. The mean price target for APA stands at $30.08, implying a potential upside of 28.8% from current levels, which may limit downward pressure on the stock in the short term.

Stocks: APA